Hi,
I am looking for some help with an underpayment penalty determination.
TurboTax indicates that I owe a $50 penalty for underpayment, even though I have 110% more in withholding and estimated taxes than my tax liability for 2024.
I sold a second home (condo) in mid-September 2025, which significantly increased my tax liability. For tax year 2024 I owed $38,852 in taxes. For tax year 2025 I had $21,815 withheld and also paid $21,027 in estimated taxes for a total of $42,842 (more than110 percent of the 2024 liability). My estimated taxes included: $1352 from my 2024 refund applied to 2025 taxes; $3457 1st qtr; $4809 in qtr 2; $4809 in qtr 3; $6600 in qtr 4. My additional taxes due are about $49,000.
I started preparing Form 2210. However, because Part 1 does not ask for estimated tax payments (only withholding), the result is that I "may owe a penalty", and it appears I would need to do a lot of further calculations in Form 2210 to reduce or avoid the penalty.
It doesn't seem as though I should be going down this path based upon the 110 percent safe haven rule. (1) Am I misinterpreting the 110% rule (2) If my interpretation is correct, is there a work-around to avoid doing all the additional calculations? (3) Is it possible that TurboTax is triggering a penalty because my last quarterly payment was higher than earlier quarterly payments?
Thank you.
