Where do I enter actual tax withheld in Kansas? Should not be paying penalty.

[kaleb70]

I had W2 income through September, then became self-employed at a much higher income in the last quarter. On my federal form I used 2210AI, and filled out the Tax Withheld Worksheet on form 2210, to avoid penalties.

But in Kansas, there appears to be no equivalent to the Tax Withheld Worksheet. Because of this I owe a penalty, even though the tax withheld on my W2 income fully covers the amounts on Schedule K-210 line 10a. Is there really no way to fix this? Is Kansas just going to punish me for being self-employed at the end of the year?

[MindyB]

The Kansas equivalent is Form K-210, which can be populated by utilizing the annualized income section in the Kansas entry.

1. Navigate to State Taxes > Your State Returns > Kansas > Start or Revisit
2. Continue through the questions until you get to Other situations. Choose Start or Revisit Estimated Tax Penalty.
3. Say yes to penalty exceptions.
4.  Enter annualized income amounts.

[kaleb70]

Thanks, but when I do this, it does not prompt me to enter the annualized income amounts. Instead, it just declares that I no longer have a penalty.

But alas, this is not the case! When I do the final check of my Kansas taxes, it informs me that on Schedule K-210 I have not entered any values in line A of the annualized income worksheet (which makes sense because it never prompted me). So I enter the correct values, and the penalty reappears.

To make matters worse, since I have no way to enter the actual amount withheld per quarter like I can on the federal, the penalty actually ends up being higher with the annualized income exception than without it.

[LeticiaF1]

TurboTax transfers data from your federal return to your state return. Before you begin troubleshooting your state return, go back through your federal return and make sure that you have entered the Kansas taxes withheld.  If you made state estimated payments during the year, enter those amounts.  

After you review your federal return, select the State Taxes tab and review the state section. Pay close attention to the information, especially if you have made changes to your federal return. There might be new sections that need to be completed. 

Where do I enter my estimated tax payments?
 

Troubleshooting common federal to state transfer issues

@kaleb70 

[kaleb70]

I think my tax forms may be completely messed up at this point. I just discovered that there's a bunch of information missing from the federal forms. This is actually really terrible.

I've decided to just completely start over and watch for the things that ended up missing the first time through, and hope I can see what went wrong.

[kaleb70]

@LeticiaF1  I went back and did my taxes from scratch. I still don't know what happened on my federal taxes, but a couple of the steps seemed to go differently this time, it collected more information and filled out all my federal forms correctly.

However, for Kansas I still have the same problem as before. When I tell it to use the annualized income exception, it declares that I have no penalty without actually prompting me for any more information, but it fails to completely fill out my K-210. When I enter the missing numbers in the annualized income smart worksheet, the penalty is not resolved because I was never given a way to report my actual quarterly withholding like I can do on the federal form.

The issue I need to resolve is that on my Kansas taxes, it still divides the W2 withholding by 4 and applies it across the quarters. So it's making it look like I underpaid in the first three quarters, when in reality I overpaid in Q1 and met the 90% requirement in Q2-3. I overpaid for the year. The penalty is only $6, but it's the principle of the thing.

[RobertB4444]

W2 payments and withholding are always viewed as paid evenly over the year even though they are not always.

I have a workaround for you but it will be a hassle and I don't know if it is worth it for six bucks.  But here you go-

Take the W2 and divide it into the four quarters.  Then enter it into TurboTax as 4 W2s.  One for each quarter with the proper amount that you received and the proper amount of withholding taken out.  You'll have to figure the correct amounts on anything in box 12 as well using the percentage of the total.

As long as all of the totals from these four W2s match the one you actually received then you're ok.  And as long as the withholding amounts when split according to the quarterly payments that you received cover the amount due for each W2 then you should be ok as well.  But it sounds like a huge hassle to me for six bucks.

@kaleb70 

[kaleb70]

Now I feel like I'm missing something. Wouldn't that just divide each of the four W2s by 4, so that the net result would be the same?

I thought about overriding TurboTax's entries on K-210 line 5 to show the actual withholdings by quarter, but since the form explicitly says to enter 25%, 50%, and 75%, I wasn't sure that would be allowed. Definitely not worth risking an audit over a stupid $6.

[RobertB4444]

Please clarify something for me - you started this by indicating that if you could take the Kansas withholding from your W2 and show that it was taken out of your checks more in one quarter than in another that you didn't think you would owe a penalty, correct?  Which indicated to me that you were not paid the same amount in each quarter of the year even though your W2 makes it look as though you were.  

If that is correct then dividing the W2 by quarters should not result in four equal pieces.  It should look like you received a separate W2 for each quarter that you were working and the withholding should match it.  If you are correct that your tax withheld in each quarter would remove the penalty if you could enter it then that should be the end result of dividing the W2 by quarter.

If you were paid the same each quarter of the year then the penalty is correct.  Entering the withholding would change nothing and you would still owe 6 bucks.

@kaleb70