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benehsani
New Member

My income is high due to 1099-INT received from my banks. My tax return for 2023 shows that I owe taxes with penalty and fees. What is the reason for the penalty & fees?

How can the penalty & fees be avoided?
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2 Replies
BillM223
Employee Tax Expert

My income is high due to 1099-INT received from my banks. My tax return for 2023 shows that I owe taxes with penalty and fees. What is the reason for the penalty & fees?

I can't be sure since I can't see your return, but the US tax system is a "pay-as-you-go system". That is, normally, if you will owe more than $1,000 in tax, you should have paid it by the end of the year.

 

Most taxpayers are employees, so they can do this through withholding, but others like the self-employed must pay estimated taxes on a quarterly basis. Please see this IRS webpage.

 

You can make quarterly payments online at Payments. It is also likely that if you owed a penalty for the Underpayment of Estimated Taxes, the TurboTax will generate form 1040-ES forms as a suggestion. That is, you can pay whatever seems appropriate; these numbers are not fixed in stone.

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My income is high due to 1099-INT received from my banks. My tax return for 2023 shows that I owe taxes with penalty and fees. What is the reason for the penalty & fees?

You can ask IRS to waive the penalty with Form 2210.

 

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