Common questions about Form 2210 in Lacerte

Below, you'll find answers to frequently asked questions about Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts, in Lacerte.

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Why does Form 2210 print when it's not required?

When an underpayment penalty applies, but Form 2210 isn't required, Lacerte will generate the 2210 Worksheets to figure the penalty amount so that you can include it in the balance due on the return. See here for more info.

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How do I enter quarterly interest rates?

To enter/edit the federal and state interest rates in the global options:

1. From the Settings menu select Options.
2. Select the Interest Rates tab.
3. Click on the Get Interest Rates button to download the interest rates or manually enter the IRS interest rates for each period (format is X.XX).
4. Scroll down to the State Interest Rates section.
5. Enter the state rates manually for each period (format is X.XX).

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Where do I enter other payments and refundable credits?

Lacerte will automatically carry the payments and refundable credits from the tax return to Form 2210. Only the payments and credits specified in the IRS Instructions for Form 2210 will flow to this line.

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How do I generate Form 2210F?

1. Go to Screen 8, Penalties & Interest.
2. Locate the Underpayment Penalty (2210) section.
3. Enter the ​​​2022​​​ adjusted gross income.
4. Enter the ​2022​ tax liability (-1=none).
5. Enter a 1 in 1=Form 2210-F.

If the 2210-F isn’t generating based on your tax liability, choose option 3 to force in the Form 2210 options field.

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How do I suppress Form 2210 and the calculation of underpayment penalties?

There are two options for suppressing Form 2210, Underpayment of Estimated Tax.

To suppress Form 2210 for all clients:

1. Click on Settings.
2. Click on Options.
3. Select the Tax Return tab.
4. Scroll down to the Federal Tax Options section.
5. Select Suppress from the Form 2210 option drop down menu.

To suppress Form 2210 for a specific client:

1. Go to Screen 8, Penalties & Interest.
2. Select Suppress from the Form 2210 options (Ctrl+T) [O], in both the Federal and State columns.

• When preparing a Multi State return in Lacerte various states may generate a Underpayment Penalty as well.

Another option to suppress the form's calculation:

1. In Screen 8 Penalties and Interest. 
2. In the second column for the State scroll down to Form 2210 (O). 
3. Click Ctrl+ E to expand , or double click to open box.
4. Enter a -1 and next to it the State you would like to suppress the penalty for.
5. Repeat these steps to suppress for each state in which you do not want a penalty generating.

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How do I complete the Annualized Income Installment Method on Form 2210, page 4?

1. Go to Screen 8, Penalties and Interest (2210)
2. Scroll down to the Annualized Income Installment Method (-1= none) section
3. Enter the AGI for each period (Enter -1 if the AGI for the period is zero)

   Note- These amounts will flow to the corresponding columns on Form 2210, Schedule AI, and annualize it . This is a required entry to trigger the annualized income installment method. The fourth quarter will flow automatically from the amounts entered on the return.

4. Complete all other fields under the Annualized Income Installment Method (-1 = none) as applicable. (Lacerte will automatically bring these amounts over from the return, use these fields as overrides)

Notes:

• The Form 2210 will not be completed if an override is entered in Form 2210 [O] (Screen 8, code 8) or the form is suppressed in Settings > Options > Tax Return > Federal Tax Options or Form 2210 options (Ctrl + T) in Screen 8.
• There is no worksheet or form to calculate AMT with the annualized Income Installment Method and this would have to be manually calculated outside of the program.

How do you Override the Estimated Tax Penalty for an Individual?

To override the Estimated Tax Penalty being calculated for an individual:

1. Go to Screen 8, Penalties & Interest (2210).
2. Enter the desired amount you would like to flow to line 38 of Form 1040 in, Form 2210 [O] (input sheet code 8).

Note: This override will suppress the automatic calculation and Form 2210. You will need to manually complete Form 2210 and paper file this return.

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