Isn't penalty on our business income included in my Federal taxes by TURBOTAX?Should I pay the penalty of $132.32 which IRS asking for with a Notice CP14?

Forum|Forum|7 years ago
June 8, 2019
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TurboTax Live Self Employed

ashoksharaAuthor

Level 2

I do not like IRS NOTICE. I can pay more in advance with taxes. How can I do so?

Critter

Level 15

TT calculates an estimated underpayment penalty based on your entries in the program however the feds & state reserve the right to access a final underpayment penalty, late filing penalty, late paying penalty, plus interest based on the info they have and when the balance due was actually paid. https://www.irs.gov/individuals/understanding-your-cp14-notice

ashoksharaAuthor

Level 2

I do not like IRS NOTICE. I can pay more in advance with taxes. How can I do so?

Critter

Level 15

What are estimated taxes?

https://ttlc.intuit.com/replies/3301588

Do I need to make estimated tax payments to the IRS?

PAYING ESTIMATES
For SE self employment tax - if you have a net profit (after expenses) of $400 or more you will pay 15.3% for 2015  SE Tax on 92.35% of your net profit in addition to your regular income tax on it. So if you have other income like W2 income your extra business income might put you into a higher tax bracket.

You must make quarterly estimated tax payments for the current tax year (or next year) if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.

- 2. You expect your withholding and credits to be less than the smaller of:
    90% of the tax to be shown on your current year’s tax return, or
  100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)