The underpayment penalty has nothing to do with when you are going to pay the taxes owed. It has to do with the fact that the amount of the withholding and/or estimated payments reported as paid in for 2021 is not at least 90% of your taxes owed.
Do you pay an estimated tax payment?
Do you have a 1099-NEC?
Are your taxes for 2021 more than your 2020 tax liability?
Do your total withholdings, including estimated tax payments, equal your tax liability in 2020?
Are you a W-2 employee?
If you paid estimated tax payments, you may not have paid enough. You may need to look at this for 2022 and possibly increase the amount you paid.
If you have a 1099-NEC, did you make estimated payments based on this income? If not, this may be part of the problem.
My last two questions, if you can answer "Yes" to both of them, you could request a waiver of the penalty.
Whatever the result is to the questions above, you should look at making adjustments for 2022 based on the tax liability you have in 2021. TurboTax will calculate estimated payments for you.
If you have any W-2 income, you could increase the amount of state withholding on your W-2 income to make up for the shortage. If you are a W-2 employee and you owe taxes, this means that you are not having enough state taxes withheld from your pay.
To make adjustments to under payment penalty follow these instructions:
- Log in and click Take Me to My Return.
- Click Federal Taxes (Personal if in Self-Employed)
- Select Other Tax Situations.
- Scroll down to Additional Tax Payments.
- Click start/edit next to Underpayment Penalties.
Make the adjustment in the Federal and there are questions about the State.
