This is what I see from your screenshots:
Start with AGI of $29k listed on your federal screenshot.
- Your federal AGI is $29k and subtract out the standard deduction of $13,850 and you get a taxable income of $15k. Federal is good.
- Your state, VA, begins with federal AGI, $29k. The VA standard deduction, shown on page 12 of 760 Instructions is $8k, along with any other deductions, so taxable income around $21k makes sense.
Tax Liability
- Federal - tax is $1.038 but you paid in $61 so you owe $977
- State - tax is $921 and you did not pay in anything so you owe the full amount plus a penalty. It just happens to be $977 also.
I am not seeing a problem. What is wrong?
760 Instructions page 26 explains the penalty:
Line 18 Addition to Tax: Use Form 760C to compute any addition to tax you may owe for underpayment of estimated taxes. Use Form 760F if at least 66 2/3% of your income is derived from farming, fishing and/or being a merchant seaman. You will not owe an addition to tax if each payment is made on time and: • you owe $150 or less in tax with your return. • total withholding and timely estimated payments were at least 90% (66 2/3% for farmers, fishermen and merchant seamen) of your 2023 tax liability after nonrefundable credits or 100% of your 2022 tax liability after nonrefundable credits. • you meet one of the exceptions computed on Form 760C or Form 760F. Enclose Form 760C or 760F showing the computation. If you do not meet the criteria shown above, visit www.tax.virginia.gov, or refer to Form 760C or Form 760F
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