Should I use my gross income or adjusted income for the form 2210AI self employment income -TP request? Should I calculate using the 92.35% or line 28 on 2210?

[whitneybrekke1]

I have used the annualized income installment method to determine if there is a smaller penalty. It wants me to check the entry for self-employment income-TP. I am not sure which number to use. Gross income? Adjusted using 92.35%? or line 28 on the 2210 form indicates an even lesser amount maybe due to IRA deduction. Can someone guide me?

[DianeW777]

Yes, you should use the adjusted gross income (AGI) taking into account only the adjustment for half of your self employment tax (.9235 of the self employment income for the self employment tax deduction). The AGI uses the full self employment income then is reduced by the deduction noted.

If your self employment was earned evenly throughout the tax year, then divide it by 12 and multiply by 3/5/8 (3 months/5 months/8 months) for the appropriate period. Likewise for the IRA and the deduction for half your self employment tax. Also use any other deductions, if any. You can use this same method for any income received evenly throughout the year. This should provide the correct numbers for your annualized method.