Hello-
Turbotax shows that we have an underpayment penalty and I'm attempting to complete Form 2210, Schedule AI to eliminate it.
Calculating Line 1 on this form is a bit confusing to me as it calls for "adjusted gross income for each quarter". See Line 1, top of PDF page 3 here: Link to IRS.gov form
For 2024, we had dividends and interest in all four quarters and a Roth conversion in December. There was no employment or other retirement income as we are early retired.
Our 1040 shows an adjustment for our individual HSA contribution of $10,300 and a capital loss for the year, both of which lowered our total income. We had only gains in some 2024 months but those were offset by prior year tax loss harvesting, so we had a net capital loss of -$3,000. I've been tracking all our monthly interest, dividends and Roth conversions in a spreadsheet so it's easy to see how much we earned per quarter.
Line 1 calls for "adjusted gross income for each quarter", which to me implies it is adjusted and may not be simply the quarterly sum of our interest, dividends and Roth conversions? Should I include the adjustments shown on my 1040 AGI for my HSA and capital loss? If so, how are those to be apportioned over the months/quarters?
The instructions state to include all income and deductions for the quarter and suggest most people use a "cash accounting method". I have the income part from my spreadsheet, just not sure if deductions should include things like an HSA contribution or net capital loss and how to apportion each of those across the quarters.
From now on we will be simply paying 25% of our prior year total tax due each quarter to avoid this situation.
Thank you.
Turbotax shows that we have an underpayment penalty and I'm attempting to complete Form 2210, Schedule AI to eliminate it.
Calculating Line 1 on this form is a bit confusing to me as it calls for "adjusted gross income for each quarter". See Line 1, top of PDF page 3 here: Link to IRS.gov form
For 2024, we had dividends and interest in all four quarters and a Roth conversion in December. There was no employment or other retirement income as we are early retired.
Our 1040 shows an adjustment for our individual HSA contribution of $10,300 and a capital loss for the year, both of which lowered our total income. We had only gains in some 2024 months but those were offset by prior year tax loss harvesting, so we had a net capital loss of -$3,000. I've been tracking all our monthly interest, dividends and Roth conversions in a spreadsheet so it's easy to see how much we earned per quarter.
Line 1 calls for "adjusted gross income for each quarter", which to me implies it is adjusted and may not be simply the quarterly sum of our interest, dividends and Roth conversions? Should I include the adjustments shown on my 1040 AGI for my HSA and capital loss? If so, how are those to be apportioned over the months/quarters?
The instructions state to include all income and deductions for the quarter and suggest most people use a "cash accounting method". I have the income part from my spreadsheet, just not sure if deductions should include things like an HSA contribution or net capital loss and how to apportion each of those across the quarters.
From now on we will be simply paying 25% of our prior year total tax due each quarter to avoid this situation.
Thank you.