Turbo Tax 2020 not adding Form 2210 for underpayment penalty

[flemming]

the wheel must be reinvented.

[flemming]

Turbotax does not automatically deal with situations where income does not come in evenly each quarter

such as investment fund investor getting large fourth quarter income compared to other quarters.  This

is main purpose of form 2210 to allow allocating income and tax paid quarterly and thereby not owe a penalty.

Fail to file form 2210 and IRS will calculate a penalty even if you 'MAY' not owe a penalty.

Form 2210 presently is in Turbotax but with errors and is not usable.

[DianeW777]

When you are signed into your TurboTax account you can choose to use the Annualized Income Method if you do owe a balance that creates a penalty. You need to go far enough to complete those screens.

1. Once in your account use the Search (upper right) > Type underpayment penalty > Press enter > Select the Jump to.... link
2. Continue to follow the screens to enter your information.
3. See the images below.

[Anonymous]

I'm sorry what are you trying to say here? Is this related to Form 2210 unavailability?

[flemming]

Form 2210 is in TurboTax and some number fields can be populated.   The form is not fully ready for

filing and will generate tax error messages (allocating taxes with held quarterly).  I am thinking and hoping IRS or/and Turbotax will have it all sorted out and fixed in program update late February??

[DawnC]

The penalty is calculated on Form 2210.   Because Form 2210 is complicated, you can ignore line 38 and the IRS will figure the penalty and send you a bill. They won't charge you interest on the penalty if you pay by the date specified on the bill.   And the form will not be ready in TurboTax until the end of the month (currently scheduled for 02/25), so if you want to not wait for the form, this is the option you would use so you can e-file now.

However, if you want a waiver of the penalty, want to include the penalty, or use the annualized income method to figure the penalty, you have to wait for the form to be finalized.  @Anonymous

[flemming]

Using annualized method,  IRS is unable to adjust without a completed 2210 -My situation.

As you mentioned, I will be waiting for TurboTax form fix.

[Anonymous]

Thanks, I did skip the annualized income (I had to go in and delete my entries, otherwise just saying no to the question didn't let me get rid of the annualized income option). Then, I declined the penalty waiver. And lastly, it asked me whether I want to pay the penalty now or later, which I said now. However, at the end it did not let me file my return until when I changed my answer to "let the IRS figure out" my penalty. So basically I had to say NO to three questions in order for me to efile tonight!

Such a mess Turbotax! Next year, I will transition to another software.

[rjsl]

I assumed that TurboTax had made all final IRS forms available.  I too owe a penalty for the 2020 tax year and allowed TurboTax to calculate it (using the short method on IRS Form 2210).  When I reviewed the return, the penalty seemed high, so I dug deeper and gave Form 2210 a hard look - walking through, step-by-step.  I found the calculation performed in line 15 (multiplying line 14 by a factor of 0.01744) didn't calculate properly.  The penalty shown on line 15 was about 50% higher than what the actual calculation was (using the calculator on my iPhone).   So, even with the reduced penalty for an early filing (which I can't do anyhow since TurboTax hasn't yet incorporated current Form 2210), the net penalty as calculated by TurboTax is higher than the full penalty as calculated by hand.  What gives with that?

Just went back and looked further.  It seems that the 2020 tax year TurboTax is still using last year's (2019 tax year) factor (0.03398) for the short method on Form 2210, rather than the current (2020 tax year) factor of (0.01744).  That would explain why my 2020 tax year TurboTax calculated penalty is about 50% higher than what it should be.  Sad situation, but glad I hadn't filed yet.

[Anonymous]

Best thing to do is to e-file now without 2210 and let IRS figures that out for you later and send you a bill with no additional late payment. And that's what I did!

[rjsl]

Thanks, I appreciate the suggestion.  I know it'll cost me another couple of bucks in penalty, but I'll wait for the final form.  I was more so concerned about the internal math error in current line 15 of form 2210 (TurboTax for tax year 2020).

[flemming]

Your situation may or may not mirror mine,  however I have no option other than waiting until Turbo has

valid  2210 form.   

[ray051667]

W22019

[hes47]

I tried to work through the Form 2210 as posted on the IRS website. I was an accountant in a former life and I spent 3 hours before I finally gave up and decided to wait for the form to be posted in Turbo Tax. Give the programmers a break here.

[johnny_cee]

I assume many will get this this year?

I've never had to estimate taxes and the only reason there is insufficient withholding is we filed for unemployment for part of the year in 2020 and had the stimulus payments. why would there even  be a penalty in this situation? There would be no cause to make an estimated payment. Wouldn't you just pay the tax on the unemployment and the stimulus as regular income?