TurboTax 2025 is telling me that I owe a penalty for underpayment of estimated taxes. Looking into it I see that there is a serious calculation error in how TurboTax is computing a critical field on California Form 5805: Underpayment of Estimated Tax by Individuals and Fiduciaries.
Here are the details:
On California Form 5805, Part II is titled “Part II - Required Annual Payment”, and on Line 5 it is supposed to have an amount entered that is either your California tax liability for the previous tax year or, if you had an AGI greater than $150k for that tax year, it is supposed to be 110% of that amount. So at most the number on Part II, Line 5 should be 1.1 times your California tax liability from the previous year.
For me it is filling in that line with a number that is almost 3 times what it should be. If I double click on the field corresponding to Line 5 on Form 5805 it takes me to the source data for the calculation. Specifically, double clicking on Line 5 correctly takes me to Line 2 of the “California Carryover Worksheet for 2025”. Line 2 on that worksheet reads: “Tax liability (Form 540, lines 48, 61, 62; Form 540 2EZ, line 21; or Form 540NR, lines 63, 71 and 72; plus any IRC Section 453A interest from Form 540 line 63 or Form 540NR line 73)”. This is the tax liability from the previous tax year and TurboTax correctly shows me what my tax liability was for 2024. GOOD!
However, when it uses that correct number to calculate what should go on California Form 5808, Part II, Line 5, the number it uses is not that number or 1.1 times that number but it is 2.9 times my previous year tax liability. This is wildly wrong! From that point it then calculates that I should have paid in estimated taxes almost 2.9x what I owed last year and of course my payments for this year fell well short. So TurboTax calculates that I owe a significant penalty!
I’m not sure how to get TurboTax to fix this extreme error and I welcome suggestions as to how to report this issue to Intuit/TurboTax. Phoning the main number for support yielded a phone call of well over an hour with someone who had no idea.
Of course this issue should be solved by Intuit/TurboTax. However, is there a way to override a calculated field in TurboTax? I know the correct number to put in that field and if I could do it manually I believe I could address this issue for my personal return.
