Fed Tax Penalty on less than $150 owed

[gomes_f]

Federal Taxes: on a recent Return, I had underpaid my taxes by $150 and was charged a PENALTY of $60.

Yet IRS website states that usually no penalties if you owe less than $1500. Please explain why Turbo Tax calculated this penalty. Thx.

[RobertB4444]

The calculated penalty may have had to do with the timeliness of your estimated payments?  Did you make some of them late or make all of them in the last part of the year?  Or pay a bunch with an extension?

@gomes_f 

[gomes_f]

Did the Roth conversion (total amount) in Dec, one time, and Paid the full taxes on it in Dec same year.  There were no estimated payment made as I did not know until the end of the year that I would make the roth conversion. a dilemma!

[VolvoGirl]

If you get a penalty on 1040 line 38, 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.

How to add form 2210 for Underpayment Penalty
https://ttlc.intuit.com/community/tax-payments/help/how-do-i-add-form-2210/00/25703

It's under

Federal tab or Personal (for Home & Business Desktop)

Other Tax Situations

Additional Tax Payments

Underpayment Penalties - Click the Start or update button

[gomes_f]

Paid all owed taxes quarterly except the roth was done (timing) in Dec and paid the taxes owed (shy $150) in December. so just 4Q was short.  Some how the roth amount was spread across each of the earlier quarters which caused the taxes to be under for prior quarters. Why is is prorated backwards when conversion was done in Dec?

[gomes_f]

Thx. I will research this form 2210 and requirements.

[RobertB4444]

A 1099-R is assumed by both the IRS and the TurboTax program to have been received in equal payments throughout the year unless you do as @VolvoGirl recommends and adjust your income for the year.

@gomes_f