The estimated tax penalty is a penalty for not paying your taxes in full throughout the year. If you are seeing a penalty, you can go back into the program under Other Tax Situations>>Additional Tax Payments>>Underpayment penalties and select start or update next to Underpayment Penalties. These questions are meant to help you apply for the exemption to the penalties.
Some exceptions to the penalty are
- You had $0 tax liability in 2023
- You paid 100% of your 2023 tax liability (110% if your income is over $150,000 or $75,000 if MFS)
- You paid 90% of your 2024 tax liability
- You or your spouse (if you file a joint return) retired in the past 2 years after reaching age 62 or became disabled and you had reasonable cause to underpay or pay your estimated tax late
You will find this under
- Other Tax Situations
- Additional Tax Payments
- Underpayment penalties
Also, when you get towards the end of the return, you should be asked by TurboTax if you want to apply for the penalty waiver.
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