Turbo Tax Estimated Penalty

[Hackut99]

Hello.

My estimated taxes that I paid for 2024 exceeds the amount of federal taxes due by $89.   Turbotax added an "estimated penalty" of $145 and now I owe $56 according to Turbotax.  I have tried going to the other tax situations and answering the questions, but none of those seem to apply to me.  Do I really have to pay a penalty even though I already paid more than is due (minus the penalty)?

[DawnC]

It is possible.  The IRS levies underpayment penalties if you don't withhold or pay enough tax on income received during each quarter. Even if you paid your tax bill in full by the April deadline or are getting a refund, you may still get an underpayment penalty.   To reduce or eliminate the penalty, see the link below.   

Why am I getting an underpayment penalty if I'm getting a refund?

[Hackut99]

Thanks.  While I did not pay my estimated taxes according to the quarterly schedule because I do not have a steady income and do not have the income to pay the taxes until later in the year, my final estimated tax payment was made on December 31, 2024.  So it is not as if I waited until April 15 to pay the taxes.  They were all paid prior to the due date for the 4th payment on 1/15/25.

[MaryK4]

You can see if you qualify for the penalty exception for annualized income- you would have to enter how much income you earned each quarter, but this will only help if your income was earned later in the year.  The IRS applies the penalty each quarter and it is compounded.  @Hackut99