The safe harbor rule in tax terms allows taxpayers to avoid penalties for underpayment if they meet certain payment criteria, such as:
- paying at least 90% of their current year's tax
- paying 100% (or 110% for high earners) of the previous year's tax liability
It looks like I fall under the second criteria (I paid 100% of my 2024 withholding thru my ex-employer and got a refund at tax time).
Just wondering why TurboTax assessed a penalty fee for tax year 2025? Though I already instruct TurboTax to let IRS calculate the penalty fee as instructed by a Level 15 community member.
