If you paid 110% of last year's tax but TurboTax is still calculating an underpayment penalty, here's a summary of what might be happening and how to address it:
IRS Requirements: The IRS imposes underpayment penalties if you don't withhold or pay enough tax on income received during each quarter, even if you pay your total tax bill by the April deadline or are due a refund,
Annualizing Your Tax: To potentially reduce or eliminate the penalty, use the "annualizing your tax" feature in TurboTax:
- Be sure you are logged in TurboTax then:
- TurboTax take you through the steps to possibly reduce what you owe.
For more details, you can refer to the TurboTax support article here.
