Retirement tax questions

If you owe over $1,200 in taxes due to interest from a 1099-INT, it could trigger an underpayment penalty for 2024. 

• The IRS requires that you pay at least 90% of your current year's tax liability or 100% of your previous year's tax liability to avoid an underpayment penalty. TurboTax will calculate if you owe a penalty and guide you through completing Form 2210 for penalty,
• IF you do receive a penalty: To possibly reduce or eliminate your underpayment penalty:
  • Open or continue your return.
  • Navigate to the underpayment penalty section:
    • TurboTax Online/Mobile: Go to annualizing your tax

For 2025, increase your tax withholding or make quarterly estimated tax payments to avoid this issue. Even if you get a refund, you may still face a penalty if you didn't pay enough tax each quarter. Follow the steps in TurboTax to reduce or eliminate the penalty.