Can I avoid a tax withholding underpayment penalty if it was due to an unexpected expense necessitating a large IRA withdrawal?

[Bsch4477 · Accepted solution]

You can’t avoid the underpayment penalty but you can avoid some of the early withdrawal penalty by excluding $10,000 of your emergency withdrawal. 

1. After you have entered all your forms 1099-R, on the summary page Review your 1099-R Info, click Continue 
2. Follow the interview until you arrive at the page titled Did you use your IRA to pay for any of these expenses?
3. Enter the amount of your amount up to $1,000 in the box next to Emergency Personal Expense and click Continue
4. Your early withdrawal penalty will be waived.

[VolvoGirl]

For an underpayment penalty.   If you get a penalty on 1040 line 38, 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.

How to add form 2210 for Underpayment Penalty
https://ttlc.intuit.com/community/tax-payments/help/how-do-i-add-form-2210/00/25703

It's under

Federal tab or Personal (for Home & Business Desktop)

Other Tax Situations

Additional Tax Payments

Underpayment Penalties - Click the Start or update button