ErnieS0
Expert Alumni

Get your taxes done using TurboTax

The penalty came up because you owed tax in 2020, not because you did not make estimated payments in 2019. TurboTax did not suggest estimated payments in 2019 because it did not think those payments were necessary based on your 2019 return.

 

TurboTax can only look backward. You can look forward. If you see that you have a lot of income without any tax withheld, it might be time to consider estimated payments during the year.

 

The IRS levies a penalty for underpayment of estimated tax if you didnt pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax.

 

Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller.

 

Refer to Penalty for Underpayment of Estimated Tax

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