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Get your taxes done using TurboTax
It depends. The IRS is a pay as you go system, so if you didn't pay enough estimated tax in the appropriate quarters you could still have a penalty. It can happen when a refund is the end result. If you did pay it evenly throughout the year and your income was relatively even throughout the tax year you should be penalty free based on what you have explained. The link below should be used to begin
- How do I add Form 2210 to my file?
- Double check your estimated tax payments were entered in the appropriate payment periods. And make sure that you have enough paid each quarter for the income earned.
You can review the annualized income/tax method in TurboTax by using the steps below. Have your 2025 return ready just to confirm your numbers.
- Open your TurboTax Online or TurboTax Desktop return
- Search (upper right) > Type underpayment penalty
- TurboTax Online: Click 'See More' at the bottom of the FAQ that pops up > Click on Go to annualizing your tax
- TurboTax Desktop: Click the Jump to.. link
- Continue selecting to use the annualized method and enter the income in the slots where earned. For wages, interest, dividends or anything earned equally through out the year divide by 12 and multiply by 3/5/8.
- Continue to follow the screen prompts
You seem to understand the requirements, they are posted here for your convenience as well.
Generally, you can avoid the penalty if your total timely estimated payments and withholdings are greater than or equal to the lesser of:
- 90% of the total tax after credits for the current year, or
- 100% of the total tax after credits in the prior year
- See one exception below.
You can also avoid the penalty if the amount you owe is less than $1,000 as long as any estimated tax payments you made are timely.
Note: High-income taxpayers. If your adjusted gross income (line 11 of your 2023 Form 1040) is greater than $150,000 (or $75,000 if you're married and file a separate return from your spouse), you can avoid a penalty by paying at least 110% of your total tax from the prior year.
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