How to figure out 2023 tax liability for underpayment penalty when I never received a 2023 Form 2210

[wapalee]

Hi, while going through TurboTax, it indicated that I have to pay an underpayment penalty. I'm figuring this likely has to do with me selling some stock in late 2024 and paying less than what was required for capital gains tax. In the form, it's leading me to enter the amount from a 2023 Form 2210 line 4 for 2023 tax liability.

I've never received or filled out a 2023 Form 2210 before so I'm not certain to do in this case. I see in the help topic, it states "If you do not have a 2023 Form 2210 or Form 2210-F then you will need to see the instructions for Form 2210 line 8. Remember you can always let the IRS calculate the penalty for you so you don't have to do this."

Does this mean for the field "2023 Tax Liability for 2210 Purposes", should I leave the field blank? And if I do have to fill it out, can you please provide clear instructions on how to figure this out from Form 2210, line 8? On that line, it just says "see instructions" but the instructions on Form 2210 are difficult to follow.

Thanks!

[Vanessa A]

No.  You can find your 2023 federal tax liability on line 24 of your 2023 form 1040. 

You will be able to claim the underpayment penalty waiver if any of the following apply:

• You paid 90% of the tax that you owe for the current year.  
• If the current taxes paid are equal to 100%, (110% for higher incomes) of your taxes owed the prior year.  
• The IRS also says you can probably avoid the penalty if the amount you owe is less than $1,000.
• To avoid this situation, it's recommended that you adjust your W-4 with your employer, or pay estimated taxes. 

For more information see, Guide to IRS Tax Penalties: How to Avoid or Reduce Them.