How do I get to alternate calculation based on when I earned my 2016 icome

[mariodieckmann]

I earned commission on Dec 30th.  I was assessed $468 penalty, how and where do I calculate the waiver or correct amount?

[HelenaC · Accepted solution]

To reduce or possibly even eliminate your underpayment penalty, search for annualizing your tax (use this exact phrase) inside TurboTax. This will take you to the underpayment penalty section, and we'll take you through the steps to possibly reduce your underpayment penalty.

Underpayment penalties are assessed if you don't withhold or pay enough tax on income received during each quarter.

In fact, it's entirely possible to get hit with an underpayment penalty even though you paid your tax bill in full by the April deadline or are getting a refund.

Here's an example: Joe is self-employed and estimated next year's tax bill at $20,000. Rather than making 4 quarterly payments of $5,000 apiece, he chose to pay $500 in each of the first 3 quarters, and the remaining $18,500 in the fourth quarter.

When he filed, his actual tax bill came to $17,270 and he got a $2,730 refund. However, he got hit with the underpayment penalty because he underpaid his estimated tax in the first 3 quarters.

Related information:

• How does TurboTax calculate taxes on part-year returns?
• What is Form 2210 or 2210-F?