2021 Form 2210 Calculation Error

[C-Starr]

I agree that Schedule AI, Line 7 erroneously excludes amount from line 12(b) of form 1040-SR as required per IRS instructions.  If anyone can help with a work-around to manually enter correct amount and not get error that prevents e-file, that'd be appreciated.  Better yet, Turbotax team should issue corrective update so that Schedule AI, Line 7 from 1040-SR 12(c) includes sum of Standard Deduction and charitable donations as indicated in instructions.

[MJK6]

(Correction: suggestion deleted)

[RRArtie]

This line becomes a deduction from your quarterly annualized income.  When you enter the quarterly income in TT reduce the income by an amount after annualization that would equal the deduction. For instance, a $300 line 12b would mean you enter in TT a first quarter income reduced by $75  ($300/4 = $75). Similar reductions would be done on the income for the second quarter (300/2.4) and the third quarter (300/1.5). Keep good notes incase you are audited. A spread sheet with the 2210 done right to compare with your TT results would be great. Hope this helps.

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[sandy4042]

Has anyone determined if Turbotax is calculating the penalty when it should?  From all appearances, I do owe a penalty (underpaid for first two quarters) yet it shows zero for the penalty.  Specifically, Line 17 of Form 2210 shows amounts for col a) and col b), underpayment for 4/15 and 6/15, but Line 19 Penalty shows zero.  I did a Quick Zoom to see the worksheet for Line 19, and it does show the underpayment amounts on the worksheet but Days Late, Rate Period, Interest Rate and Penalty fields are blank, so it apparently didn't do the calculation.

Second question, if I eFile as is (zero penalty erroneously calculated), will the return be flagged immediately by the IRS, and give me an opportunity to correct?  If not, and it's caught further down the line, will I owe more interest and penalty? 

[MJK6]

Your question is pretty difficult to answer in the general sense.  As of today, I observe that Turbotax has now correctly included the 1040 line 12(b) amounts in form 2210 line 7; the original problem with the overstatement of 1Q annualized income was fixed some time ago.  2020 refunds applied to 2021 are still not included in line 11, and I believe the form 2210AI line 14 tax computation to still be incorrect.  In my case I believe they are undercalculating my annualized tax obligation in columns (a), (b) and (c), but the resulting required installments are the same with or without the error.  I have filed with the errors and documented my calculations.  Your situation may be different.

[sandy4042]

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@MJK6 wrote:  2020 refunds applied to 2021 are still not included in line 11

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Thanks, I went back and checked.  Yes, my refund applied to 2021 is not included in line 11.  So I am not given credit for it for 4/15/21.  If I had been, I would have no underpayment for that quarter or the next.  I am comfortable filing since zero penalty is in fact true.

Do people ever override Turbo tax mistakes and type in their corrected entries in Forms mode?  Or does Turbotax not allow e-filing if that has been done?

[MJK6]

I know I’ve done overrides in the past, but it is not allowing it on this form, this year.  You can try but it will likely not allow you to Efile. 

[sandy4042]

Thanks, I think I will follow your example.  I've never done overrides before and don't want to risk it.  Especially since the end result (zero penalty) is the same.

[ibjim88]

There’s an update for the TurboTax bug you encountered in the Mac desktop program: 

Form 2210, Schedule AI, Part 1, line 7: not adding in Form 1040, Line 12b, Charitable Deduction, ($300-600).

We’re happy to inform you (via e-mail, dated 03/24/22) that we’ve updated TurboTax and resolved the issue you experienced.

The updated version is REV03/19/22 TTMac, as noted in the fine print at the bottom center of the printable file copy forms.

[sandy4042]

Thanks for the update.  I hadn't noticed the revision notification on the forms before, very helpful in determining whether one's print out is up to date.

A question though, when are the updates applied to data that one has already entered?  For example, I completed a first pass of my tax return early in March to the point where it just needs a final review by me before filing.  Since then fixes have been applied to Form 2210 (possibly other forms) which may change some calculations.  Are those fixes automatically applied to my return, and when?  Do I have to go through query mode again to have the Turbotax program recalculate with fixes incorporated?   Or possibly (hopefully) when you initially start Turbotax and it says to wait while it is performing program updates, it is doing the update to your return?

@MJK6 

[RRArtie]

@sandy4042  I don't know the internals of TT, but have used it for years. I have a spreadsheet that predicts taxes and in most instances through the years it has matched TT. So I think TT recalculates everything after an update.

However, last year when we had similar 2210 problems the posts talked about deleting the form (you can do that in the forms mode) and reentering the data. I would definitely do that if I had used some of the workarounds and 2210 TT calculations fixed annualized the Capital Gains and added the Charitable Deduction. I have filed, so I don't know what has been fixed since middle of March.

Hope this helps. 

[sandy4042]

It does, thank you.  I'd always assumed that the Turbotax program was in its final form by the time I usually file but the 2210 discussion has shown that not to be true.  For what it's worth, I did check my standard deduction field on my 2210 form (not updated since 3/7), first thing when I opened the program yesterday, and it did show the updated calculation that included the $600 charitable deduction for a married couple.

[BRTone]

Interestingly enough - if you are in the "Step-by-Step" mode, when you get to the end of the deductions section, and it presents you with a summary of deductions for 2020 and 20221, it shows the max $600 charitable duction there, but the math is wrong.  It adds the std. deduction of $27,800 with $600 (I also have an extra Qualified business deduction of $37) and comes up with $27,837 instead of $28,437.   But on the very next page it shows it is taking $28,400 as my standard deduction.

Then when I get to the Federal Review section comparing 2020 and 2021 deductions, it once again displays $27,837 when it should be $28,437.  And on that page if you click on the small fonted link to the "Detailed Tax Breakdown", it once again does not show the $600 for charitable deductions.

But thankfully the $600 does now show on form 2210AI and also shows on form 1040 line 12b, and is correctly accounted for in those places - the math is right.  It seems that some of their internal summary display pages do not correctly handle this charitable deduction.  

[sandy4042]

Strange, indeed.  At least the detail and the forms are correct but it shakes the confidence in the product for the summaries not to accurately summarize the detail.  I personally noticed only one glitch, when starting my State taxes.  It had pre-filled a field for the state tax liability for last year (2020) which was incorrect.  I replaced it with the correct amount.  I tired to figure out where it got the wrong number but to no avail.

[artg]

@sandy4042 

Good morning Sandy.  You nailed the operative terms as follows: "but it shakes the confidence in the product."

Simply, preparing my 2021 return has caused serious angst because I can't trust what I'm seeing when I know my entries are accurate.  I've spent considerable time and effort "checking the math" the past six weeks when I never had to do that before.  I'm not prepared to say I'm giving up on the product but this tax preparation cycle has given me pause for concern.