IRS Form 2210

[vmuralid]

My 2024 Federal Tax was accepted by IRS after submission through TurboTax before 4/15/2025.

I have since received a notice from IRS saying: "We reviewed your estimated tax penalty computation for the tax period ended 2024, and found an error. Our correction of this error increased the penalty to $xxxx."

The instructions provide further for removal or reduction of penalties requires me to file a Form 2210 with corrected calculations or reasons for waiver of the penalty.  However, I cannot access Form 2210 with TurboTax. It says that I do not have to file that form. 

Please provide guidance on how to access Form 2210.

Thanks.

[JotikaT2]

First, follow these steps to get back into your 2024 tax return.  Then, see how do I add Form 2210? for steps to add the form into your tax return.

[vmuralid]

The proposed solution does not enable access to Form 2210.

It says:

No underpayment penalty.

   Based on the entries you don't have a penalty for underpayment of estimated taxes.

   Do you want to review the estimated taxes topic.

On selecting Yes to this, TurboTax shows the question:

Farmers and Fishers

     Was at least two-thirds of your gross income in 2024 or 2024 from farming of fishing?

Possible Penalty Exception

Since you 2023 tax liability was zero you might be able to avoid some or all of a penalty this year if you can answer yes to both of these questions.

• Did your 2023 return cover a full 12-month period?  Or, if you didn't file last year, would it have covered 12 months had you filed?
• Were you a U.S. citizen or resident in 2023?

When I answer Yes to both questions it loops back to the first screen: No underpayment penalty.

Clearly there is a mistake in either TurboTax calculations of underpayment penalty or IRS's calculation.  Please advise how to handle this problem.

[DoninGA]

Look at your Form 1040 on Line 38.  If there is not an estimated tax penalty entered then you will not have access to Form 2210 in the TurboTax program.

[vmuralid]

Line 38 of 1040SR shows as blank.  However, as explained in original question, IRS has sent a letter charging me a penalty for failing to pay estimated taxes.

As indicated, this means there is an error in TurboTax calculation (which they guarantee against) or the IRS calculation (based on return submitted through TurboTax).

Please advise on how to respond to IRS.

[DoninGA]

Review this IRS website for the penalty and how to remove or reduce the penalty - https://www.irs.gov/payments/underpayment-of-estimated-tax-by-individuals-penalty

If you are using the TurboTax desktop editions, then you can access the Form 2210 using Forms mode.  Click on Forms.  When in Forms mode click on Open Form at the top left of the screen.  Type in 2210 and then click on the result to open the form.

If you are using the TurboTax online editions, then you will have to complete the Form 2210 using the IRS website.

Go to this IRS website for the Form 2210 - https://www.irs.gov/pub/irs-pdf/f2210.pdf

Go to this IRS website for the Form 2210 Instructions - https://www.irs.gov/pub/irs-pdf/i2210.pdf

[fanfare]

@vmuralid 

You can get Form 2210 and 1040-X in fillable PDF fromat from IRS.
If you fill out Part 1 correctly you will confirm either TurboTax (zero) or IRS (not zero).

If you want to request a waiver of IRS's amount using 2210 Part II Box A,
or point out your result of no penalty, or both,
attach Form 2210 to Form 1040-X and mail it in.

Penalties:
1040-x Line 16: Subtract any penalty from the amount you owe reported on original 1040. (in your case Zero)
Don't try to include, but ignore, any new or changed penalty.
IRS will calculate your new penalty on their own and will bill you.

Note: when you are not changing any dollar amounts on your amending 1040-X, you can leave all the lines 1-23 EMPTY.

Don't even think about including your old 1040 nor your revised 1040 because the Form 1040-X reflects any changes there and becomes your new tax return.

[baldietax]

To avoid penalty, you need to have paid thru withholding or timely estimated tax, the smaller of 100% of your 2023 tax (110% if AGI > 150k) or 90% of your 2024 tax.  You can also do this safe harbor calculation manually to verify the TT calculation and then need to understand why IRS calculated differently.

TT calculates penalty based on the information it's been given for 2023 AGI/tax and estimated tax payments.  IRS calculates it independently based on information in their systems.  If they came back with a different result then you should check if there was any adjustment to your 2023 or 2024 AGI/tax that wasn't reflected in TT, or if you paid estimated taxes check that the IRS has the same amounts and payment dates as TT by checking your account on irs.gov.

If you are using TT desktop in Forms mode you can double click on line 38 on Form 1040 and again on the worksheet to bring up the Form 2210 calculations.

[Mike9241]

did you pay estimates by mail and drop them into a PO box on the due date. Then the USPS may not have processed it to the following day using that date as the postmark. then per the iRS the payment is late.  Another possibility is you estimate was timely postmarked but the clerk entering the payment in the system may not have used to PM date. In short you need the IRS calculation to see what happened.

[Mike9241]

Exceptions to the Penalty
You won't have to pay the penalty or file this form if either of the following applies.
•
You had no tax liability for 2023, you were a U.S. citizen or resident alien for the entire year (or an estate of a domestic decedent or a domestic trust), and your 2023 tax return was (or would have been had you been required to file) for a full 12 months.

was you 2023 tax liability zero?

[vmuralid]

Thanks for the multiple responses. Realize I hadn't given the full context and background of this issue, which are as follows.

• My 2023 tax liability was not zero. I was full-time employed until Oct 23, when I retired.
• My income in 2024 was solely from pensions and interest/dividends/withdrawals from investment accounts. Total income was about 50% of my 2023 income, and about 50% of 2024 income was from an IRA withdrawal in Dec 2024.
• I did not pay estimates in advance.

After receiving the notice of penalties for underpayment from IRS, I reviewed Form 2210 instructions and saw that I had two options: a) request waiver of the entire penalty because of the retirement event in 2023, or b) request reduction of the underpayment amount based on the fact that 2024 income was not uniform across the year and was back loaded to Dec, using Form 2210.

When I tried to open Form 2210 in TurboTax, I ran into the problem described in the original post above. I did download the form from IRS but found it very complex, and would have very much liked to use TT forms to fill it out - which is why I raised the issue on this forum.

Option (a) was simpler; following directions in the underpayment penalties notice, I have sent a letter to IRS attesting to the retirement in 2023. Hope this works.

When filing 2024 returns TT actually calculated penalties for underpayment of my State tax returns, and enabled me enter the non-uniform distribution of income over 2024 and thereby reduce penalties.  However, TT seems to have completely missed this issue for my Federal return. Considering their "100% Accurate Calculations Guarantee", this is disappointing.

[baldietax]

Sounds like TT didn't have your correct 2023 tax info if you were getting interview prompts stating it was zero when it wasn't actually zero.  Usually this is carried over from prior year return, if not you have to input it.  When you go to Other Tax Situations / Underpayment Penalty after the Farming/Fishing question (assuming this was No) it then asks for filing status and "2023 Tax Liability for 2210 Purposes", if incorrect you would enter the correct figure there.  TT would then calculate the penalty based on 90% of 2024 if that was smaller etc, and then you can go thru the AI method similar to state.