I agree with @TMG92 and @VolvoGirl , using the annualized income installment method (Form 2210) may get rid of the penalty. I can see this working for example if you got an end of year bonus. TT and IRS by default will attribute income (including the bonus) evenly throughout the year. They will divide your withholding also evenly. If you didn't meet the required payments for 4/15, 6/15, 9/15 or 1/15 through withholding + any estimated payments, an underpayment penalty is calculated, even if you owe no taxes at the end, or are due a refund. By using Form 2210, you can assign the extra income at the proper time in the year, and avoid the underpayment for an earlier payment date when the extra income had not occurred yet. Though you might not want to go through the trouble for $2!
