I just received a lovely notice from the IRS with a penalty charge for "failure to pay proper estimated taxes". My question is, why didn't TurboTax indicate this earlier?

[Kokamoto]

IRS code section 6654 is referenced. I understand that you have to pay quarterly estimates. But I don't understand why TurboTax wouldn't calculate the penalty and inform me when I used TurboTax to file.

[LenaH]

In order for TurboTax to calculate penalties on your return, you would have to enter your correct 2019 tax liability on the interview screen when prompted. Did you enter that section when filing out your tax return? If not, TurboTax will not calculate a penalty. 

Estimated tax payments are generally required, if you expect to owe $1,000 or more when the return is filed. If your income is received unevenly during the year, you may be able to avoid or lower the penalty by annualizing your income and making unequal payments. 

[Kokamoto]

Yes I did enter my 2019 info when prompted (I've also been using TT for many years). 

[fanfare]

TurboTax has lots of problems in many areas this year.

You might consider a different tax software provider.

[jailson]

I have the same issue and have no idea why there is an underpayment penalty if TT calculates what I pay. 

[VolvoGirl]

Did you have a penalty on 1040 line 38?   The amount Turbo Tax calculates on your 1040 line 38 is only an estimate.  Turbo Tax can not figure it accurately because they don't know exactly when the IRS or state will get your return and tax due payment.  It's very common and normal and expected for the IRS or state to bill you for more or send you a refund.

[Critter-3]

The TT program only calculates an estimated underpayment penalty based on the info you entered in the return but the feds/state reserve the right to recalculate the underpayment penalty based on when you actually file and pay the balance due along with the information they have on file for you ... it is common to get a final bill from the IRS for more penalties & interest. 

If you owe then the TT program will produce estimate payment vouchers to use for the next tax year ... if you choose not to use them or don't pay the estimates timely  then  that is your choice.