Hello! We used TurboTax to file our federal and State (Hawaii) tax returns this year. In an effort to both understand our situation and to help TurboTax assist its customers, our question is this: We took a lump sum distribution this year from an IRA and received a 1099-R. We paid the federal tax at the time of the distribution, but did not pay any state tax, the thought being that we would pay it on our return the following year. We made our tax payment to the State and received a letter recently from the State indicating that we have underpaid our state taxes, now owing more tax and incurring a penalty. We have yet to receive further information from the State on what additional tax is owed, but they referred us to complete a worksheet and we calculated that we owe another $241. I think the lesson learned is that in the future we will pay tax on both state and federal at the time of distribution, but our question is why did TurboTax underestimate our State tax due? We have had no problems in the past when using TurboTax for our federal and state returns and want to have continued confidence in using TurboTax in the future.
