Turbo is adding an underpayment penalty. Our retirement check has taxes taken out. I work part time and only made $10k, so employer did not withhold. Why penalty?

[SteamTrain]

The underpayment penalty is applied...most commonly, if you owe more than $1000 at tax time, though there can be some exceptions if you paid (thru withholding) more than your total tax assessed last year.

And then there's always a bunch of subtle details about how&when the exceptions are applied, but I'm not going into those.

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Your retirement withholding "might" have been enough if that was your only income for the year, but the added $10k of wages, with no withholding was not accounted for.  If you continue to work that job, either submit a new W-4, indicating you have x-amount of other income, so that the job withholds some more Federal taxes.  That would be the best option.   (you could also increase your withholding for the retirement check, but if you stop that job, the retirement withholding might be too high, and need to be re-set.)

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[VolvoGirl]

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