IRS Form 2210, officially titled Underpayment of Estimated Tax by Individuals, Estates, and Trusts, is used to calculate any penalties incurred due to underpayment of taxes over the course of the year. Taxpayers typically use Form 2210 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 IRS Form 2210, follow these steps:
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Find your prior year's total tax: This is located on line 24 of your previous year's Form 1040.
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Check any applicable boxes: If any specific conditions apply to your situation, such as exceptions or adjustments, mark the corresponding boxes on Form 2210.
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For AGI over $150,000: If your Adjusted Gross Income (AGI) from the prior year was more than $150,000, you must enter 110% of your prior year’s tax instead of just the total tax amount.
Do I need to file Form 2210?
In general, you may owe the penalty if the total of your withholding 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 (found on line 24 of your prior year 1040),
- Whether you're requesting a penalty waiver,
- Whether your required installments are based on prior year tax while filing as Married Filing Jointly.
If your prior year AGI was over $150,000, enter 110% of the prior year’s tax.
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 year. However, completing the form will calculate your underpayment penalty. If you don’t file it, the IRS will send you a notice detailing any penalties.
What If I use the annualized income installment method?
Our software does not support the annualized income installment method. If you need to use this method, you must complete Form 2210 manually. Refer to the instructions for Form 2210 for help.
Where do I enter Form 2210?
To enter Form 2210 in the program:
- Select Federal from the left-hand menu.
- Choose Payments & Estimates.
- Click Underpayment of Estimated Tax.
- Complete the form and press Continue to calculate any penalties.
For more information regarding Form 2210, please see the IRS Form 2210 instructions.