I receive a large portion of my income in the month of December in the form of Mutual fund distributions. I make more than enough estimated payments in the first three installments and enough to cover the December distributions in January, however TurboTax shows an underpayment penalty. Is there some way to adjust for this?
This has nothing to do with TurboTax being incomplete. By default, income is treated as having been received uniformly throughout the year but estimated tax payments are credited when paid. If the Q1 through Q3 estimated tax payments were not each sufficient to cover roughly one-quarter of your total tax liability such as happens if you need to make a larger Q4 estimated tax payment, you'll need to annualize income on Schedule AI of Form 2210 to avoid an underpayment penalty for earlier quarters so that income is not treated as received equally throughout the year.
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