Form 2210 Underpayment of Estimated Tax, is used to calculate any penalties incurred due to underpayment of taxes over the course of the year. Form 2210 is typically used by taxpayers when they owe more than $1,000 to the IRS on their federal tax return.
How do I complete Form 2210 within the program?
To complete Form 2210, you must enter your prior year tax which is found on line 24 of your prior year 1040 and check any corresponding boxes if they relate to your situation. If your prior year Adjusted Gross Income was greater than $150,000, enter 110% of your prior year tax.
Do I need to file Form 2210?
In general, you may owe the penalty if the total of your withholdings and estimated payments didn't equal at least the smaller of:
- 90% of your current year tax, or
- 100% of your prior year tax. Your prior year tax return must cover a 12-month period.
If you are unsure if you need to complete Form 2210, please use the flow chart at the top of the form to help decide.
Prior Year Tax
Within our program, Form 2210 will ask for your prior year's tax, if you are requesting a penalty waiver, and if your required installments are based on prior year tax while filing as Married Filing Jointly.
You can find your prior year tax on line 24 of your prior year 1040. If your prior year Adjusted Gross Income (AGI) was more than $150,000, enter 110% of the prior tax year instead.
What if I do not file Form 2210 but underpaid taxes?
You are not required to file Form 2210 if you underpaid taxes during the tax year. Completing the form will recalculate your amount owed to include your underpayment penalty. However, If you do not complete the form, the IRS will send you a letter detailing your underpayment penalties after your return is processed.
What If I use the annualized income installment method?
Our software does not support the completion of Form 2210 if you use the annualized income installment method. You will need to complete Form 2210 manually to calculate your penalty.
Where do I enter Form 2210?
To complete Form 2210 within the program, please follow the steps listed below.
- Select Federal from the directory on the left-hand side of the page
- Select Payments & Estimates from the same directory on the left
- Choose "Underpayment of Estimated Tax" from the listings on the Payments & Estimates page
- Complete the form, then press continue to calculate any underpayment penalties
For more information regarding Form 2210, please see the IRS instructions.