Yes. You can still owe a penalty when you have an underpayment due to change in status. However, you can request to have the penalty waived if the underpayment was due to a reasonable cause.
" If you have an underpayment, all or part of the penalty for that underpayment will be waived if th...
The underpayment may also be avoided if:
- You paid 90% of the tax that you owe for the current year.
- If the current taxes paid are equal to 100%, (110% for higher incomes) of your taxes owed the prior year.
- The IRS also says you can probably avoid the penalty if the amount you owe is less than $1,000..
For more information, see, Guide to IRS Tax Penalties: How to Avoid or Reduce Them.
To do this in TurboTax you will select the following:
- Federal
- Other Tax Situations
- Underpayment Penalty
- Answer the questions and follow the instructions to determine if you can get a waiver from the penalty.
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