Get your taxes done using TurboTax

Here are exact steps so your return gets accepted, along with an an explanation of what's happening.

(This applies to people who DO owe federal tax, and whose total money paid in during the year through your job withholding and/or estimated tax payments are in between 85% and 90% of your total tax due.)

THE PROBLEM: Form 2210 gets included with your return automatically in certain situations in which TurboTax thinks you may owe a small penalty for not having enough taxes paid in throughout the year (such as through withholding on your paychecks from work, or sending in quarterly estimates if you're self-employed). Usually, if you've paid in 90% of your tax bill, then you don't have to file Form 2210 or pay that small penalty (and there are a couple of other exceptions to paying that small penalty).

BUT... the tax law changes in 2018 kind of messed with the amount many people were having withheld from their pay checks, so there were a lot of people who would have fallen just short of that 90% threshold . My understanding is that the government basically said "Hey, we're not going to change the form, but for 2018 if you had paid in at least 85% of you total tax bill through withholding or estimates, then we'll let you off the hook from any penalty. But you have to fill out the form 2210 and write on there that the 85% Exception applies to you."

If you're a person reading this, you probably ran into this problem, and TurboTax has probably (appropriately) included Form 2210 to your return, and in the bottom half of that form, under Part II, letter A, they probably typed "85% Exception" at the end of the wording for that Letter A.

While the IRS is SUPPOSED to accept it that way (with "85% Exception" written on the actual Form 2210), the PROBLEM is that the electronic verification systems at the IRS are looking for an additional page of the return to provide the explanation of what exception gets you out of paying that small penalty.

HOW TO FIX IT: In order to make it so that the IRS will accept your return electronically, you have to FORCE TurboTax to add another page to your return. It is a very short page called "Additional information from your 2018 Federal Tax Return". To do this:

1. Go back into TurboTax to edit your return.

2. Click for the "Personal Tab" then "Other Tax Situations" (I'm using the Home & Business edition, what you need to click may be slightly different depending on the version you're using). If it asks you if you want to explore on your own, that's what you want to do (rather than having them ask you a ton of unrelated questions).

3. Under the heading of Additional Tax Payments, next to Underpayment Penalties, click the Update button.

4. When it asks "Do you want to review the information on your Underpayment of Estimated Tax form?" say YES. Then just CONTINUE through the screens about filing status, tax liability, and adjusted gross income. Say NO to Annualized Income Method. Say NO to Actual Withholding. And CONTINUE past the Date Of Payment screen. Now.... you're finally almost to the right place....

5. On the "Penalty Waivers" screen, say YES (because you have an "unusual circumstance" as mentioned on the screen.

6. On the "You Can Request a Waiver" screen, say YES.

7. On the "Do You Want to Reduce Your Penalty" screen, say "WAIVE ALL"

8. On the "Penalty Waiver Info" screen, there are some blank lines that says "Explain reasons for waiver (use as many lines as necessary)." You ONLY need to type "85% Exception" into the top line. Then CONTINUE.

9. The next screen should say "You don't owe an underpayment penalty. However Form 2210 must be filed...." Just continue on by clicking "Done with Penalty".

10. Go to the Federal Review tab.... and go back through the normal steps for resubmitting your return through the e-file process. When it gives you the chance to preview your return, you should DEFINITELY check it. There should be an additional page added as the last page of your Federal return, called "Additional information from your 2018 Federal Tax Return" which will only fill about 1/4 of a page, and all it should say on it is "Form 2210: Underpayment of Estimated Tax, Line 17, Waiver Explanation Statement, 85% Waiver".  That's what you want, so that the electronic verification of your incoming return at the IRS sees that page and says "Yep, this person submitted that extra page to tell us why they felt they deserve to have the penalty waived. All is good. Approve their submission."

Hopefully, the IRS will fix this bug eventually, but the steps above should work for many people who encountered this problem.

(Note: I'm not a tax professional, and not an employee of Intuit/TurboTax... just been doing my own taxes and using tax software a long time. Hope the instructions above were helpful.)