form 2270

[ronroberts]

If my sole taxable income is a one time IRA withdrawal, does the online version of TurboTax basic process the form for equalization of income? I believe that would be form 2270.

If not, what version would I need.

Thanks!

[VolvoGirl]

Don't see a form 2270 on the IRS website.  What do you mean equalization of income?  Maybe that's a state thing?  You will get a 1099R for the withdrawal in January.  Yes you can enter it into all versions of Turbo Tax.  

[ronroberts]

I don't see a way to edit my post. I made a mistake with the form. I meant form 2210. This applies when you receive an unexpected lump sum of income and previous estimated taxes were too low. Evidently the IRS doesn't have a way to process  a disproportionate amount income received one quarter, and thus assumes that amount was received in each quarter. 

An example would be if every month you withdrawal a small amount from your IRA, but then one month say in the 4th quarter you need to withdrawal a large amount for a new car or major home repair. Form 2210 is used to equalize the lump sum among all 4 quarters. I'm not sure, of this but I think that the form 2210 just figures the penalty owed for underpayment in the earlier quarters, and the IRS doesn't give you any grace for the earlier quarters being of lesser income.

[VolvoGirl]

Yes it says all versions have 2210.  And it's called Annualized Income. If you have a penalty on your tax return, you might be able to eliminate it or at least reduce it.  You can go to Federal Taxes tab or Personal tab, under Other Tax Situations and select Start by the Underpayment Penalties. You will answer a series of questions that may reduce or eliminate the penalty. Or you can elect to have the IRS figure the penalty for you.  It's from 2210.

IRS form 2210

https://www.irs.gov/pub/irs-pdf/f2210.pdf

2210 Instructions

https://www.irs.gov/pub/irs-pdf/i2210.pdf

[NCperson]

@ronroberts be sure to check Part II Box C on form 2210 so that the annualized method is used.