Although I was massively over-withheld for the first half of the year, I fell behind in the 3rd and 4th quarter and ended up getting hit with a big late penalty. I was able to lower it somewhat by using the actual payments rather than the deemed equal installments but it is still pretty large. I noticted that over half of the penalty was being generated by the 4th quarter underpayment which Turbo tax seems to default to being paid when the return is due on 4/15/25 (90 days at 7%). However, I ended up getting laid off at the end of the year and received a severance package in late January which included a large amount of tax withheld - Way more than the amount of my underpayment. Unfortunately, the payment wasn't made until January 17 (after the 1/15/25 due date for the 4th quarter) so it is not reflected on the Form 2210 which only picks up payments through the due date.
I realize the January withholding is supposed to be for the severance payment, but shouldn't the payment be applied to the prior taxes that were due for 2024 first? That would result in my underpayment only being 2 days late rather than 90 days late. I know that could leave me underpaid for 2025, but there is still a lot of time left in the year and as long as I meet the safe harbor by the end of the year, it shouldn't matter.
Is there any way to address this in Turbotax?
Any help would be greatly appreciated!
