Why does the IRS issue a penalty for having *unequal* quarterly tax payments, even if my quarterly payments correctly reflect owned taxes for that particular quarter?

[LA2025]

I don't have a crystal ball as to what my employment status (currently not working), dividend/interest amounts will be, if I decide to do Roth IRA conversions this year, etc.  I'm happy to pay taxes for the quarter that has just passed, but the expectation of me being able to predict my future income and set an equal tax amount to pay per quarter starting this month (when the 1st set of quarterly taxes are due) for this entire tax year seems odd.  What am I not understanding?

[Bsch4477]

You would calculate your income for the quarter and make the appropriate self employment tax payment.  Generally 30% or so of your net income generally works. 

[LA2025]

Thank you for your reply.  But I'm not self-employed, nor, unfortunately, does this answer my question about the IRS wanting EQUAL quarterly payments, otherwise they penalize you. 

[VolvoGirl]

If you do not pay enough tax, you may have to pay a penalty for underpayment of estimated tax. Even if you are getting a refund you can still owe a penalty for not paying in evenly during the year.  Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. It is included in your tax due or reduces your refund.

If you get hit with a penalty you can fill out form 2210 to try to reduce or eliminate it.  

[VolvoGirl]

Turbo Tax on form 2210

What is Form 2210? - TurboTax Tax Tips & Videos