incorrect underpayment penalty by turbotax?

[imissjack]

We calculated our income each quarter.  It is very irregular due investments. We used annualized method where we entered income thru 31mar21, then thru 31may, then thru 31aug, (original question had 30jun, then thru 30sep) then it automated our income thru 31dec21. Turbotax calculated underpayment penalty and we paid that. We just received a letter from Colorado stating it was wrong and we owe more money. How and why? Was Turbotax incorrect?  Colorado has this on form 204 part 4.  I can not find how to ask CO their reasoning, just they want me to upload supporting docs... which would simply be same forms again, rather than they not answer this. Any CO tax experts know why? Any info appreciated.

[Mike9241]

for the ai method for colorado it's income/expenses  for 3 months 5 months 8 months and the whole year not 3,6,9  and 12

you did it wrong for the 2nd and 3rd quarters.

https://tax.colorado.gov/sites/tax/files/documents/DR0204_2021.pdf 

[imissjack]

• Thanks. I mentioned incorrect dates on this original post only. Any knowledge why Turbotax didn't provide correct penalty? Or why Colo would have changed the amount? Or how we can contact Colo to ask these specific questions?

[fanfare]

If they won't talk to you, you have to correspond in writing.

Suggest you just pay the difference.

Despite a reputation and a guarantee, TurboTax can make calculation errors, it calculated my 2020 income tax due incorrectly, and I had to use other software.

Also if you are using the quarterly computations, due to the complexity it's easy to make a mistake in filling out the form.

@imissjack 

[VolvoGirl]

Turbo Tax just figures an estimated penalty.  It's common for the IRS or state to send you a bill for more or some refund.  It might depend on when they got  your tax due payment.  

[fanfare]

The calculation should be correct for underpayment of estimated taxes.

If you are late also (past Tax Day), TurboTax cannot calculate that portion.