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I am retired and receiving no regular income except Social Security. I take my RMD as needed to replenish my checkbook. When I take an RMD, I withhold taxes at 1% above my last year's effective tax rate. Additionally I pay quarterly estimated tax payments (to cover Social Security and a small amount of interest income). This year I will get a refund of several thousand dollars - almost 50% of what I paid in withholding and estimated payments.

TurboTax requires me to complete Form 2210. (For what reason eludes me), but within that form I am required to distribute my deductions into quarters. This presents a paper-chase that just seems unduly complicated. For example trying to track down whether a doctor bill was paid before or after March 31 or seems unnecessary.

So my question is (finally), how accurate must the quarterly deductions be?

please note I edited the question, I intended to say deductions originally

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    If you are underpaid by at least $1000 and at least 10% and certain exceptions don't apply you have to pay a penalty, and for some situations that penalty can be reduced by calculating it per 'quarter' (actually 3-2-3-4 months not true quarters) on form 2210 schedule AI. I would expect software like TT to try that option when 2210 applies, although it would need both income and deductions per 'quarter'. But you say you are significantly overpaid, so it shouldn't do 2210 at all (with or without AI) -- at least if your estimated payments were equal (or frontloaded) and timely. – dave_thompson_085 Jan 31 '18 at 4:58
  • I'll take up why I have to file 2210 at all with TT. My question really becomes something like this: What degree of trouble might I anticipate from an IRS auditor if I were to be rather casual and simply divide (for example) an annual medical insurance deduction into quarters as versus ascribing that total payment to a specific quarter? – BobE Jan 31 '18 at 15:41
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First, as commented, you shouldn't need form 2210 at all, with or without schedule AI, if you are overpaid in total (as you say) and your estimated payments were at least equal and timely (which you didn't respond about, although your case would need pretty substantial backloading to get penalty).

If/when you do underpay (not within $1k withholding and not within 90% of liability or 100% or 110% of previous year) or your estimated payments are sufficiently below equal and timely, then in some cases you save money by using AI, which is entirely optional as far as the IRS is concerned -- you may use it if you choose, and people typically choose to do so when it benefits them, but you aren't required to. Like other cases where you have an option, TurboTax is presumably programmed to check whether this benefits you, in the same way it (much more often) checks your itemized deductions to determine whether you save money by itemizing or not, and recommending accordingly -- although that recommendation I know from experience you can override, because there are cases where you need to make an itemization choice that isn't the cheapest.

Also as commented, to do AI TurboTax will need the 'quarterly' breakdown of both income and deductible expenses, although you are focussed solely on the latter. If you enter these amounts divided as 3-2-3-4 twelfths (not equal quarters) then the AI calculation should produce exactly the same result as the plain 2210 without AI, and I expect TT will automatically drop AI, producing a return that looks exactly the same to IRS as if it had never even considered AI. (From experience I know several other cases where it drops unneeded schedules and forms, such as 1116 for foreign tax that is all payor-reported and below the de-minimis limit.) Even if TT insists on including AI, although you are actually submitting and signing a return that includes some slightly incorrect information, it produces a result exactly and demonstrably equal to an option that is (explicitly) permitted, and I can't imagine any auditor(s) will penalize you for that.

If this still worries you, as far as IRS is concerned you also have the option to file a return without 2210 at all, even when you are subject to the penalty, as long as you don't want to use any of the special cases (AI, actual withholding, hardship); IRS will then compute the 'vanilla' penalty (if any) and bill you for it. If you can't get TT to drop 2210 entirely, which you are pursuing directly with Intuit, you could NOT e-file, print out a paper return, discard 2210 and erase or black-out line 79, and file the modified paper return -- which is now entirely correct and valid. Although a paper return will take longer to process, and cost you postage (or FedEx/etc).

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    The TT support community claim that there is a bug in this years desktop software in that during the review process users are told that data is missing in their 2210AI, when in fact Form 2210 is not needed at all. – BobE Feb 4 '18 at 3:41
  • But my original question has to do with the accuracy of the data one would enter in the 2210AI quarterly. When the form asks the taxpayer to break up the total deductions into quarters that initiates a process where the taxpayer has to decisions - (for example) should I simply divide total property tax into 4 equal parts, and ignore that one half was assessed and paid during the 1st quarter, and the other half was assessed and paid during the third, and that no property taxes were paid during the 2nd and 4th quarters. So my question has to do with accuracy and honesty. – BobE Feb 4 '18 at 3:53
  • But thanks for trying to answer. I am just going to try to delete 2210 completely. – BobE Feb 4 '18 at 3:55

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