If you owe the IRS 2 years in a row, the IRS can legally determine you needed to pay Quarterly Estimated Taxes for the balance. The last quarterly payment is due Jan 15th of the year you will file. So 1/15/2025 for the 2024 year tax return. The penalty is based on when the actual payments were made, as the IRS has access to all the payroll tax payment amounts and dates paid. Unless you provide all your paystubs to your tax expert, they cannot report these payments accurately to calculate the penalty. Here at TurboTax Full Service we err on the other side. We recommend paying the penalty so the IRS doesn't continue to accrue interest and penalties on you. And sometimes part of the penalty is refunded once the return is processed.
Some ways to avoid an Estimated Tax Penalty for 2025 are to pay Estimated Tax Payments to the IRS by 1/15/2026 or increase your withholdings.
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Best regards,
Catherine
TurboTax Expert
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