Instructions for Form 1040 state:

Because Form 2210 is complicated, you can leave line 23 blank and the IRS will figure the penalty and send you a bill. We won't charge you interest on the penalty if you pay by the date specified on the bill.

I know I should have been paying estimated taxes after reading Publication 505 (but didn't realize until now), but am I correct in my understanding that I can really just leave line 23 blank and the IRS will figure it out for me and bill me at no additional cost? Sounds too good to be true.

  • I think what they mean is that they will figure what the penalty for not paying estimated taxes will be, and bill you for that. That's in addition to whatever tax you have to pay with your form 1040. – jamesqf Feb 17 '19 at 4:41
  • @jamesqf, yeah that’s what I was assuming. Sorry if I wasn’t clear. – Adam Johns Feb 17 '19 at 5:37
  • You still pay the same taxes and penalty, you just save maybe 6 weeks interest on the penalty -- a little more if you file on paper. The median tax for 2016 (latest pub 1304 available) appears to be about $7500 and for that with no withholding or estimated payment the worst-case form-2210 penalty is $270 on which 6 weeks interest is less than $2. You're not winning the lottery here. Plus if you (would) benefit from using by-quarter amounts (i.e. 'annualized' on schedule AI) or actual withholding dates, their automatic calculation doesn't (can't) give you those. – dave_thompson_085 Feb 17 '19 at 21:46

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