Underpayment penalty with estimated taxes

[Frayacohen2]

Given I paid the turbo tax suggestions for estimated taxes from last year on time why would I owe an underpayment penalty this year?  Are the default suggestions given that won’t hit underpayment penalties based on 2022 taxes?

[VolvoGirl]

Do you have a penalty on 1040 line 38?  it's not for filing or paying late.  It doesn't have to do with last year's tax return or not paying estimates for this year.  The penalty is an "estimated" amount.    It's a penalty if you owe too much or for not paying in enough withholding during the year or not paying in evenly.  It's very common and normal and expected for the IRS or state to bill you for more or send you a refund.

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

[Mike9241]

The Turbotax estimates are based on the assumption that your 2023 withholding will be the same as 2022. also make sure the dates you paid and entered for the estimates are by the due date.

you'll need to review the 2210 to see why there's a penalty.