Yes, TurboTax will automatically calculate an underpayment penalty based on failing to pay estimated taxes or having enough withholding (if one is due). During the interview, TurboTax will prompt that you are being charged for an underpayment penalty but it tends to come up as one of the very last items before filing.
You can check to see if one is being applied by Previewing your Form 1040 and looking at Line 79 Estimated Tax Penalty. You can preview your Form 1040 in the online version by following the steps below -
- Log in your account
- Click Take Me to My Return
- Select My Account (top right of blue banner)
- Select Tools
- Select View My Tax Summary
- Here you will see a Tax Summary of your return so far
- In the grey banner, click Preview my 1040
- Scroll down to Line 79
If you have been assessed an underpayment penalty, then you can see if you may qualify for an exception to the penalty. You may want to look into these exceptions if this is the first year you owed tax and it is not a normal occurrence (i.e. you had one time income this year) or when you have income in one quarter like you have indicated, then, by using the annualized method, you may be able to lower or eliminate the penalty.
You can review the underpayment penalty section by using one of the following two methods
First, you can perform a search within the program.
- Log in and click Take Me to My Return
- Use the search icon in upper right hand corner (magnifying glass icon)
- Search for “underpayment penalty”
- Click the “Jump to underpayment penalty” link
- This will take you directly to the section of the program where you can review the underpayment penalty and possibly qualify for an exception
Second, you can use a step by step method of getting the to same place above
- Log in and click Take Me to My Return
- Click Federal Taxes (Personal if in Self-Employed)
- Select Other Tax Situations
- Scroll down to Additional Tax Payments
- Click start/edit next to Underpayment Penalties
