I received an letter from the IRS stating that I owe an additional $478 in penalties for failure to pay proper estimated tax. Was my recent tax return incorrect?

[Kat]

The IRS operates on a "pay as you go" system, meaning they expect taxes for each quarter to be paid based on that quarter's income.  Maybe you had one quarter where you had more income than in another?  

If your income fluctuates throughout the year, you can choose to "annualize" the income, which will allow for fluctuating estimated tax payments, too.  I believe the info in the TurboTax FAQ below will be helpful.

https://ttlc.intuit.com/replies/4242891

[Critter]

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 or 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

For instance,  if the 2017 program said you should pay $1000 a quarter and you transferred in that info to the 2018 program then the program calculates the penalty on the $1000 a quarter you were supposed to pay ... however if you did not pay those payments timely  and did not correct the program's assumption that you did (maybe you missed the april payment but caught up on the june payment ... or paid it all on one payment  in January) then the fed/state know this and made the correction and billed you accordingly.

To see whether a payment has posted or view your overall balance, you can use the Get Transcript tool to request a Tax Account Transcript or Record of Account Transcript.

[rlmiller999]

Why doesn't TT tell me I owe late payments?
Is there a way to appeal this?

We received a small estate inheritance without advanced warning of course this increased our AGI

Ray

[Anonymous]

form 2210

Who Must Pay the Underpayment Penalty
In general, you may owe the penalty for 2019 if the total of your withholding and timely estimated tax payments didn't equal at least the smaller of:
1. 90% of your 2019 tax, or
2. 100% of your 2018 tax. Your 2018 tax return must cover a 12-month period

Higher income taxpayers. If your adjusted gross income (AGI) for 2018 was more than $150,000 ($75,000 if your 2018 filing status is married filing separately), substitute 110% for 100% in (2) above

To request Waiver of Penalty
If you have an underpayment, all or part of the penalty for that underpayment will be waived if the IRS determines that:
• In 2018 or 2019, you retired after reaching age 62 or became disabled, and your underpayment was due to reasonable cause (and not willful neglect); or
• The underpayment was due to a casualty, disaster, or other unusual circumstance, and it would be inequitable to impose the penalty. For federally declared disaster areas, see Federally declared disaster, later.
To request any of the above waivers, do the following.
1. Check box A or box B in Part II of 2210.
a. If you checked box A, complete only page 1 of Form 2210 and attach it to your tax return (you aren't required to figure the amount of penalty to be waived).
b. If you checked box B, complete Form 2210 through line 16 (or if you use the regular method, line 26 plus the penalty worksheet, later) without regard to the waiver. Enter the amount you want waived in parentheses on the dotted line next to line 17 (line 27 for the regular method). Subtract this amount from the total penalty you figured without regard to the waiver, and enter the result on line 17 (line 27 for the regular method).
2. Attach Form 2210 and a statement to your return explaining the reasons you were unable to meet the estimated tax requirements and the time period for which you are requesting a waiver

this will prevent you from e-filing/ when you mail your return be sure to use a method where you gate proof of delivery. Follow TT filing instructions carefully including the need to attach any form that shows withholding.

The IRS will review the information you provide and decide whether to grant your request for a waiver

[rjs]

@rlmiller999  See your own question that you posted in a separate thread.

I received a notice from IRS that I have a penalty for "Failure to pay proper estimated tax"