Partial 401K rollover to Roth IRA

[a0324]

I did a partial 401K rollover to a Roth IRA the last week of 2021. I paid estimated tax for this rollover to the IRS online the first week of 2022. I am working on my 2021 taxes with my desktop version of Turbotax and it is saying I have a underpayment penalty, probably because I don't normally make quarterly estimated payments, but I made this one time, end of year rollover. How can I be getting a penalty if I am getting a refund?

[ThomasM125]

You need to make estimated tax payments on a timely basis. For instance, you can't wait until January and pay all off your tax due for the previous year and avoid a penalty for late payment of tax. Your tax needs to be paid in on a quarterly basis. So, you can get a penalty for late payment of tax even though you get a refund, as the timing of those payments is key in determining a late payment of tax penalty.

In your case, it looks like you paid the tax for the income earned in the fourth quarter on a timely basis, so if you have a penalty showing in your program, you can choose the Underpayment penalties option in the Other Tax Situations menu tab in TurboTax to use the Annualized Income Method to report your income by quarter which may eliminate the penalty.

[dmertz]

Form 2210 has not yet been updated for 2021 and presently functions improperly.  You'll need to wait for this form to be updated, currently scheduled for the 02/17/2022 release.

[a0324]

I tried using Form 2210 today and I don't think it has been updated. On the schedule 1A of the form, line 7 asked for the sum of the Standard Deduction and line 12b (charitable contributions) from the 1040. It is not computing this correctly and I cannot change the amount.

[dmertz]

On 02/17/2022 Form 2210 was released for filing despite it being bug-ridden.  Apparently developers are working on fixes.  We'll see what the 02/24/2022 release brings.

[a0324]

I tried again today. On Form 2210, page 3, schedule 1A, line 7 says to enter the sum of your standard deduction and line 12b from form 1040. Turbotax automatically puts the amount in the column but only the standard deduction. It does not include the line 12b amount, which is the charitable contribution. I can't remove or correct the amount. I am pretty much at a standstill.

[a0324]

There is still a problem with form 2210. It does not add line 12b from 1040 to the standard deduction amoount that is entered on line 7 of form 2210 and I cannot manually change the number. Also, can someone explain the Capital Gains Tax Computation Smart Worksheet? Do I just equally split the total capital gain/loss for the year and enter it for each period or do I have to put the exact amount for each period?