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Underpayment Penalty - More Interest earned on 1099-INT

Hi,

Based on the withholding from my W2 for 2024, I don't owe any tax on my return.  But, when I entered the interests I earned from my bank's 1099-INT (from CD), I end up owing over $1,200 taxes.

Does this mean it will trigger underpayment penalty for 2024 taxes?

 

If yes, what do I need to do for 2024 return?

If yes, what do I need to do for 2025 to avoid this happens again?

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2 Replies
SabrinaD2
Expert Alumni

Underpayment Penalty - More Interest earned on 1099-INT

If you owe over $1,200 in taxes due to interest from a 1099-INT, it could trigger an underpayment penalty for 2024. 

 

For 2025, increase your tax withholding or make quarterly estimated tax payments to avoid this issue. Even if you get a refund, you may still face a penalty if you didn't pay enough tax each quarter. Follow the steps in TurboTax to reduce or eliminate the penalty.

 

Underpayment Penalty - More Interest earned on 1099-INT

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