TurboTax miscalculated my penalty for both Federal and State two years in a row..

[richardm75]

I owed taxes for both Federal and State. TurboTax calculated a late payment penalty amount and I paid that too. A couple of week later I received refund checks from both the IRS and CA State, with the explanation that my penalty calculation was too high, and they were refunding the difference.  The same thing happened last year. Why is TurboTax getting the penalty calculation wrong? Does anyone else have this problem?

[VolvoGirl]

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.

For next year.....

You might be able to eliminate it or at least reduce it.  You can go to Federal Taxes tab or Personal tab, under Other Tax Situations and select Start by the Underpayment Penalties. You will answer a series of questions that may reduce or eliminate the penalty. Or you can elect to have the IRS figure the penalty for you.  It's form 2210.

It's under

Federal or Personal (for Home & Business Desktop)

Other Tax Situations

Additional Tax Payments

Underpayment Penalties - Click the Start or update button