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Data entry

Annualized plans overview

An annualized plan is a one-year, four-period plan that calculates federal quarterly estimated payments. Annualized plans let you provide different quarterly payment amounts for clients whose income is earned unevenly throughout the year. For example, a client with income from a seasonal business or with large capital gain transactions at the end of the year.

Create annualized plans

To create an annualized plan, mark the
Annualized Plan
 checkbox in the
New Plan
 window when adding a new plan. The entry in the
Number of Alternatives
 field changes to
4
, and the
Number of years
 field changes to
1
.
note
Annualized plans are only federal plans; states can't be added.

Work with annualized plans

Annualized plans cover one year and four periods: 1/1-3/31, 1/1-5/31, 1/1-8/31, and 1/1-12/31.
If the AutoSpread feature is turned on, any data that you enter spreads appropriately to the columns to the right. The AutoSpread feature spreads income and deduction amounts in such a way that assumes that the income or deductions are earned or paid evenly throughout the year. Amounts that should not vary with each column, such as the
Taxpayer dependents
 field in the
Main
, then
Exemptions
 tab, will copy to each column without changing their value.
AutoSpread won't overwrite amounts you have previously entered in the columns to the right.
note
You can override any amounts inserted by the AutoSpread feature, and you can turn off the AutoSpread calculation by selecting the Auto-spread Annualized button on the toolbar.

Calculations in annualized plans

Planner CS calculates the minimum required quarterly estimated tax payments in the
Payments
, then
Annualized
 tab. This tab replicates the Annualized Estimated Tax Worksheet found in IRS Publication 505. Planner CS displays the taxpayer's required quarterly estimated payments in the
26d. Estimated tax pmt reqd
 field at the bottom of this screen. Enter the taxpayer's actual quarterly payments made (which may or may not equal the required payment) on the
Payment
, then
Federal Pmts
 tab. For additional information about entering federal payments for an annualized plan, select the
1st ES payment
 through
4th ES payment
 fields and press
F1
.
When using an annualized plan, if the taxpayer's payments are less than the calculated minimum required, Planner CS calculates the underpayment penalty in the
Payments
, then
Underpayment
 tab using the Form 2210 Annualized Income Installment Method worksheet.

This article applies to:

  • PRODUCT: Planner CS