Help! This is for “Underpayment of Estimated Tax by Individuals, Estates and Trusts”.

Many retirement/annuity payments are usually posted/paid/credited at the end of the month – assume for this purpose it is. Social Security is not; it’s paid 3x over the month starting the second Wednesday based on your birth date.

The total tax withheld periods on Form 2210 are rather wonkey – 1/1-4/15, 4/16-6/15, 6/16-9/15 and 9/16-12/31. These roughly equate in days to 104, 61, 92 and 122. No clue as to why the IRS couldn’t simply have made them equal to ~90 days each. As I get paid in the social security first wave, my monthly payments have always been before the 15th of each month.

I am trying to fill in the tax withheld worksheet for Part II, Line D, which is checked if “Your penalty is lower when figured by treating the federal income tax withheld from your income as paid on the dates it was actually withheld, instead of in equal amounts on the payment due dates. You must figure our penalty and file Form 2210.”

As an example, for the first period, 1/1-4/15, I include my monthly social security withholding for January, February and March -and- do I also include withholding for April as it always posts to my checking account before April 15th? So, the first tax withheld period for the year would include four social security federal tax withholdings?

Or do I simply treat social security as paid at the end of each month for Form 2210 purposes?

For me, this will make a difference as to how much money gets carried over to the second tax withheld period (4/16-6/15).

Thanks.

To blunt get a CPA. Mine deals with this stuff and has saved me plenty of money and hassle.

First make sure you don't qualify for any of the exceptions, I assume you did that.
Second, the general advice I have heard on this is to let the IRS calculate it, as they may not apply it at all. And if you do, and they apply it, you can then dispute that amount.
But if I understand your question when I have done these using the actual method, its the actual dates. So if it got withheld before 4/16 it goes in the 1st quarter.

It sounds like you're doing this by hand and filling out the form manually?

I've done my own taxes ever since I can and I did it manually until consumer tax software programs became available. I kept the knowledge I have when I did the tax returns manually but using the tax software is so much easier. There is usually a mode you select where the software walks you through questions to see if you need to fill a form and then walk you through the items line by line. That's my first suggestion to you.

Secondly, do you have the instructions for Form 2210? You can google Instructions for Form 2210 and it's available. Link

Thirdly, did you go through the decision tree at the top of the form and you ended up with the only "YES" box that said "You must file Form 2210 and that B, C, or D applies? I'm not trying to insult your intelligence; I'm just going through the checklist. So, did you fill out Part 1 already?

Fourth, did you complete Part III yet? It doesn't sound like it if you're asking where to put your April numbers. To answer your question, yes you enter your social security withholding for April in column (a) because it posted before April 15. When the money hits your bank account, you earned it as well as you paid the tax that was taken out. But you would enter it in line 11. In line 10, you would put 25% of Part 1, Line 9 in each of the columns.

And as the instructions say for Part 3, you go down the lines in Part 3 one column at a time before moving to the next column. You do lines 10 through 18 for column A before doing lines 10 through 18 for column B until you get to column D.

You can go through this exercise to see if you can end up paying less than letting the IRS figure out how much penalty you pay. So, including the withholding for April in the first column is to your advantage.

As to why the columns are grouped that way, my guess is because we have a progressive tax table, in that your tax due are lower or zero for lower income which is during the first four months of the year. As the year goes on, you move up the income tax table. Then the last column is 1/15/25 because they give you a 15 day grace period to pay income you received through December 30.

Here's my last tip for you. I don't get any taxes withheld from my wife's social security and when I start getting SS, I won't get any tax withheld either. I have IRA accounts at Schwab and if you have IRA accounts at a brokerage, you can do what I do. If you don't, I'll still give you another way. But both require tax planning.

You figure out for the upcoming year what your income will be roughly, then figure out what your taxes are on your income net of your standard deductions. I take out IRA money beginning of the year and I don't pay taxes. then in June, when I take out IRA money, I also have Schwab take out how much money I want them to take out and pay Federal taxes for however much money I've taken up to that point. This is conservative method. You can actually wait until December to take out a small IRA withdrawal and have the brokerage pay your full year's tax and the IRS computer thinks you paid it at the beginning of the year. But I play by the rules and I pay as I go. In October, I make my final withdrawal for the year and also pay my Federal income tax. That way, I don't have to worry about penalty payments for paying less than 90% of taxes due in the year.

If you're strictly on a pension plan and SS, then you can go online to the IRS and pay that way, except you would have to be more in keeping with their schedule. I have to do that for my state income tax as my state (AZ) doesn't have a system to take payments from a brokerage.

Good luck.

I use TurboTax but I also have an Excel spreadsheet with linked worksheets that mimics TurboTax for my tax situation. I am trying to get my 2025 tax spreadsheet ready for this year and validate my 2024 tax spreadsheet w/TurboTax. My spreadsheets have so far been ±$2 in both federal and state refunds, which I attribute to rounding between TurboTax and Excel.

Yes, I read the Form 2210 Instructions. I find them a bit lacking, IMO.

Yes, I went thru the decision tree on Form 2210. Part I-III filled out.

Yes, I completed Part III. I just needed some confirmation on what FITW I place in what payment periods - SS FITW was my outlier.

With Vanguard pushing people to move their mutual fund accounts into brokerage accounts, the option to have federal tax withholding vanished (they never did allow for VA state taxes). Thus, I had to begin quarterly tax payments to the IRS mid-year. Additionally, the much shorter second tax period (61 days) doesn't allow for the addition of quarterly dividends that are posted on/about 6/30 (the second tax period ends 6/15). It's been a learning experience for me with the 2210 and quarterly tax payments.

But adding that 4/10 SS payment into the first payment period will allow a little more tax money to move into the second period per Part III of the 2210. I'll just need to make sure the four 2025 quarterly estimated tax payments are all made within the payment periods. And right now my 2025 spreadsheet is showing no penalty.

I know exactly what my 1099 income is for the year and a very good estimate as to my interest/dividend will be, which gets better as the months pass.

Then it makes me wonder how the IRS would know to place that April 10, 2024 social security payment FITW in the first payment period? Do they run that payment against your birthday? That's going quite deep.

Thanks for the help, folks!

Reading this tax stuff gives me a headache. The government will always get an F in the prose they use. I recall my father getting really pissed filling out the forms. There are only a few things worse. Standing in line at the Social Security office would be another. The DMV would be a close second.

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Help! This is for “Underpayment of Estimated Tax by Individuals, Estates and Trusts”.

^^^^^^^
I got slapped with an 8 thousand dollar penalty for underpayment. It took a year to work out. I was living in a disaster zone which was granted an underpayment extension. My CPA helped me with this. Good luck

quote:

Originally posted by 229DAK:
I use TurboTax but I also have an Excel spreadsheet with linked worksheets that mimics TurboTax for my tax situation. I am trying to get my 2025 tax spreadsheet ready for this year and validate my 2024 tax spreadsheet w/TurboTax. My spreadsheets have so far been ±$2 in both federal and state refunds, which I attribute to rounding between TurboTax and Excel.

I also use Excel for my tax planning with linked sheets for income, dividends, capital gains, etc. But I just go with standard deductions. My main purpose is to make sure I don’t have to pay any penalties, don’t go past the IRMAA threshold, and plan how much I can convert into a Roth IRA.