Uneven income

Forum|Forum|2 years ago
August 30, 2023
2 replies
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IRS charges a fine if you do not make equal quarterly self-employment tax payments. My income is not evenly distributed over the year so I make uneven payments. 1. Will T.Tax software let me produce Form 2210 where I can mark the choice, in Part 2, C "Your income varied during the year and your penalty is reduced or eliminated when figured using the annualized income installment method"
2. Will T.Tax let me input my information in order to complete Section Schedule AI—Annualized Income Installment Method?
3. Will the IRS will use the annualized income method for Net long-term capital gains that I received unevenly throughout the year?

Ask the Experts - Self-Employed - Aug 2023

Tax Hero Niki

HI evalucia!

I love to see how much research you have done on this topic so far.

Yes, Yes, and Yes!

1. Yes. Navigate here in the program -> Federal -> Other Tax Situations -> Estimates
Be sure to check out the same section within the State section of the program, too.

2. Yes, this is covered.

3. Yes, several methods are permissible, and the program will walk you through them.

evaluciaAuthor

Thank you so much! You have lifted a weight off my shoulders!

MarthaT

Great question and very complicated. To answer your question Turbo Tax will allow you choose the Annualized Income method. You need to go to Other Tax Situations/ Additional Tax Payments/ Underpayment penalties/Continue/NO if not Farmers & Fishermen/2022 Filing Status/2022 Tax Liability/2021 Adjusted Gross Income/Annualized Income Method (YES).

For your Net long-term capital gains that you received depends on your income since it will be tax at a different rate (0%, 15%, or 20%). You can find more at https://www.irs.gov/taxtopics/tc409

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