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The federal tax system is a pay as you go system.  As you make money, you have to pay taxes on that money. You may have an underpayment penalty if you didn't have enough taxes withheld from your income throughout the year on your W-2 or if you're self-employed and you didn't pay enough estimated taxes.   To try to reduce or eliminate it, review the TurboTax article Why am I getting an underpayment penalty?   For more information, refer to the TurboTax help article Guide to IRS Tax Penalties: How to Avoid or Reduce Them for tips to use in the future.   You can contact the IRS to request a one-time abatement of your underpayment penalty. For individual tax returns, call 1-800-829-1040, 7 AM - 7 PM Monday through Friday local time.  

Hi All - I'm struggling on this topic this year as well. Every year I receive RSUs that vest from my company - in 2024, I decided to sell all the ones that I held for longer than 1 year. Fidelity gave me a 1099 that I imported for my Federal taxes without issue.   However when I got to the IL portion, and it had me fill our the same/similar info for the stock sales, which I thought was a bit odd, but didn't think anything of it, until I got ready to file, and it stated that I couldn't e-file because of the stocks that I entered for IL (via an IL-4644 form). I'm concerned here when I Google about the form (from IL dept of revenue), the instructions mention using a 1040, schedule D or a 1041, schedule D - neither of which I have from Fidelity. So it really makes me wonder if I should be entering this info for the sales into TurboTax at all? Any advice would be appreciated.

You can't ignore the message as you won't be able to e-file your return with an error like that. The box 5 entry insinuates that you may have had a distribution from a ROTH IRA. If so, the amount distributed should be listed in box 1. The code "1" in box 7 means the distribution was premature, so there would be a penalty tax on the earnings which should be listed in box 2. If you did receive a distribution, you should talk to the broker about it and see why those entries aren't on your form and request a corrected one. If you didn't receive a distribution, then you don't need to enter the form into TurboTax but you should request that the broker delete the form if appropriate.

Simply indicating that the rollover was to a Roth IRA will not cause TurboTax to treat the rollover as taxable. To be treated as taxable, the correct taxable amount must be in box 2a.   This problem usually occurs when you request a direct rollover from a 401(k) to an IRA but fail to indicate that the rollover is to be to a Roth IRA.  When the funds are diverted to a Roth IRA, the Form 1099-R that reports the rollover as having been made to a traditional account  will be wrong.  Unless request to the plan really was to make the rollover to a Roth IRA and the plan simply made an error by reporting a taxable amount of zero, the plan is unlikely to change the Form 1099-R to put the correct taxable amount in box 2a and you would need to file a substitute Form 1099-R (Form 4852) showing the correct taxable amount, with explanation.  Filing a substitute Form 1099-R precludes e-filing with TurboTax.

Is that really so?  What do you make of this response from another expert:   An NRA that elects to be treated as a US taxpayer under 26 CFR 1.6013-6 is only subject to tax rules listed in title 26 of the US code (i.e. the IRC). Since the rules for FBAR filing are in title 31 of the US Code, no FBAR filing requirements exist for an NRA that makes the election. Furthermore, the IRM 4.26.16.3.1 (07-01-2008) states that the FBAR instructions should be used, and those instructions clearly state that an FBAR is only required for a US resident or citizen. Consequently, an NRA spouse that elects to be treated as a U.S. taxpayer does not need to file an FBAR.

I figured it out. When you fill out the info for the 1099-K, don’t say that you sold everything at a loss. Choose the option that says you sold some at a loss. Then you go to the 1099-B section and you will see it prompt you to fill out the details of your 1099-K, at which point you can show you had a loss. Problem solved!!

Yep, I have the same problem.  Please tell me exactly where the "TurboTax that distributed amount is the calculated required amount." button is found because I too was not asked that question.   Any mount added into the RMD minimum amount box is then being taxed.  I assume the function should just add a penalty if the RMD amount was not fully withdrawn.  

Q. When applying for the Lifelong education credits, would subtract the total amount reimbursed by my employer for both 2024 and 2025?  A. Yes. Although mismatched years are  a problem for some other education tax benefits, you are allowed to do it that way for employer reimbursement.  Note: any additional employer reimbursement you get in 2025 will be taxable. That 2025 payment, although for 2024 tuition, counts as you 2025 tax free benefit.    Q. Or should I subtract the amount paid for fall classes and apply it to next year's taxes along with the 2025 reimbursement?  A. No.  Your not allowed to claim 2024 tuition on your 2025 tax return.  Furthermore, taxwise, your reimbursement must be matched to the tuition your employer tagged it for. 

@ThomasM125 Thanks a lot for your answer! This helps a lot! One additional clarification: I have not sold the shares that I acquired from the company (after a part of this was sold by the company to cover for taxes). In this case do I still need to adjust the cost basis and include the income reported in my W-2 form? Or do I need to do it next year when I sell the shares?

Box 1 is $58,936 and Box 5 8s $72,640, so the difference is $13,704. Book and computer expenses (not paid to university) are around $380, so don't make much of a difference.  I already deleted the 1098-T once and reentered it.  TT correctly shows in the tuition and fellowship in the education section of deductions and credits.  The $13,704 shows up as income on Schedule 1, line 8r, which goes to line 8 on 1040. I had to trick TT to get it reported by saying it was used for room and board.  Now I have one response saying that if it's reported as income, I can take the credit and yours that says I can't! 

There is no blue Requests link and I am not expecting a refund. I do see the balance that I owe and can make that payment through the Louisiana website. But, if I do that, I do not want the payment setup through Turbo Tax to be made also.

We are not able to respond to business and occupation tax (B&O) or sales tax questions. Contact your state offices or a local professional in regards to whether you have responsibility for these taxes as a LLC.   Telephone Information Center Mon through Fri, 8 a.m. - 5 p.m. (PT) (closed Wed 8-9 a.m.) Closed on holidays. 360-705-6741  Business licensing 360-705-6705  Tax assistance 360-705-6706  Español (impuestos y licencias) 360-704-5900  Remote sales and consumer use tax 360-534-1324  Forest tax