The underpayment penalty is owed when a taxpayer underpays the estimated taxes or makes uneven payments during the tax year that result in a net underpayment.
You may avoid the Underpayment of Estimated Tax by Individuals Penalty if: Your filed tax return shows you owe less than $1,000 or. You paid at least 90% of the tax shown on the return for the taxable year or 100% of the tax shown on the return for the prior year, whichever amount is less.
IRS Form 2210 (Underpayment of Estimated Tax by Individuals, Estates, and Trusts) calculates the underpayment penalty if you didn't withhold or pay enough taxes during the tax year.
We'll automatically generate a Form 2210 if your return needs it. Or you can revisit this section:
Note: You'll need your prior year tax return to answer the questions.
- Sign in to your account
- Search for underpayment of taxes.
- Select the Jump to link in the search results.
- The Underpayment Penalties screen will display the penalty amount. Select Continue to review this section and make any needed adjustments.
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