I'm trying to determine if this is a mistake in TurboTax or just another weird tax law I don't understand. Hopefully this is the right place to ask.
Looking at my Form 2210 worksheet, there's a $5 penalty for a partial amount paid in September (considered late) when "first installment" showed a larger amount due in July that I didn't entirely pay. I paid most of it. But that installment was from my own self-chosen estimates when I did my tax return last year. I'm self-employed.
In September I paid a lot more than my estimated installment. Then in December (instead of January) also paid a high amount because my running calculations showed my estimates were too low. I didn't want underpayment penalty.
Now after doing my tax return for 2020, I had actually OVERpaid my estimates because, among other things, I decided to max out my retirement contribution. So I'm getting a refund (which I've elected to apply to next year). All seems good. I don't care if the US Treasury doesn't pay me interest on the extra money I give them.
But I'm still facing an underpayment penalty of $5 ?!?
Is this something just within TurboTax that's carried year over year?
If not, if it's some weird tax law, I might as well just pick super low estimates every year to avoid such penalties! Is this what everybody else is doing that newbie me is only now learning?
