Why is overpayment different from Amount Refunded or Applied to 2021?

Forum|Forum|5 years ago
March 30, 2021
1 reply
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Overpayment of tax is $2243, yet TT fills in $2232 as amount refunded or applied to 2021. Where did the $11 go? Not a big deal but frustrating to this logical person that I can't find why $11 disappeared. Double click on the forms leads to Estimated Tax form that has $2232 already filled in, not $2243.

Best answer by SteamTrain

Even with a refund...there can be a penalty.

Any $$ ( $11 ) on line 38 of the form 1040 ?

SteamTrainAnswer

Level 15

Even with a refund...there can be a penalty.

Any $$ ( $11 ) on line 38 of the form 1040 ?

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

paddamsAuthor

Level 4

Yes, line 38 is an estimated tax penalty. Funny, I only had W-2 income last year aside from a modest amount of investment income. How is the estimated tax penalty calculated? Seems if I have $2K being refunded/credited to 2021, you wouldn't think I underpaid whatsoever. We only had $16K in earnings that didn't have tax withheld. My Excel spreadsheet for quarterly estimates seemed to show a shortage so I paid nearly $10K in estimated tax. I guess I'll sift thru Turbo Tax again and perhaps it will explain the penalty. What am I missing? Thanks.

VolvoGirl

Level 15

If you do not pay enough tax, you may have to pay a penalty for underpayment of estimated tax. Even if you are getting a refund you can still owe a penalty for not paying in evenly during the year.

You might be able to eliminate it or at least reduce it. You can go to Federal Taxes tab or Personal tab, under Other Tax Situations and select Start by the Underpayment Penalties. You will answer a series of questions that may reduce or eliminate the penalty. Or you can elect to have the IRS figure the penalty for you. It's form 2210.

It's under

Federal or Personal (for Home & Business Desktop)

Other Tax Situations

Additional Tax Payments

Underpayment Penalties - Click the Start or update button

If you have the desktop program you can switch to Forms Mode (click forms in the upper right (left for Mac)) and open the 2210 form. If the 2210 doesn't show up in the left column, click on Open Forms at the top of the left column. Type 2210 in the search box and open the 2210 form. Check box C to let the IRS calculate it.