No, it is not the same thing. If you mark the Let the IRS figure the penalty and bill me later, Form 2210 does not get sent to the IRS. Underpayment of estimated tax by individuals applies when you don’t pay estimated tax accurately or on time as an individual.
If you want TurboTax to figure the penalty, don't check that box (Let the IRS figure the penalty) and go through the penalty interview. You will also be asked if you want to try to lower or eliminate the penalty by annualizing your income. Or you can request a waiver. For any of these options, Form 2210 is included in your return and sent to the IRS. Your estimated penalty will show on Line 38 - that has to be paid in addition to your tax due from Line 37 if you are choosing to include the penalty instead of letting the IRS figure the penalty.
The simplest option is to check the box and allow the IRS to figure the penalty. But if you want to remove or reduce the penalty, you need the Form 2210 completed.
If you meet the conditions below; there is no penalty. From IRS topic - Underpayment of Individual Estimated Tax
- Your filed tax return shows you owe less than $1,000 or
- You paid at least 90% of the tax shown on the return for the taxable year or 100% of the tax shown on the return for the prior year, whichever amount is less. If your adjusted gross income (AGI) for 2023 was more than $150,000 ($75,000 if your filing status for 2024 is married filing separately), substitute 110% for 100%.
The IRS urges taxpayers to check into their options to avoid these penalties.
- Check your withholding often and adjust it when your situation changes. To do this fill out a new Form W-4 and give it to your employer. The Tax Withholding Estimator is a helpful tool.
- Estimated tax is the method used to pay tax on income that is not subject to withholding (for example, earnings from self-employment, interest, dividends, rents, alimony, etc.). Use Form 1040-ES to figure and pay estimated taxes on time.
How the penalty is calculated
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
