topic Why do I have an estimated tax penalty on line 38 of my 1040? in Get your taxes done using TurboTax

Why do I have an estimated tax penalty on line 38 of my 1040?

krauter — Tue, 10 Feb 2026 10:38:16 GMT

Re: Why do I have an estimated tax penalty on line 38 of my 1040?

Vanessa A — Tue, 27 Feb 2024 14:56:47 GMT

The estimated tax penalty is a penalty for not paying your taxes in full throughout the year. So if you have a tax due of more than 10% of your tax liability, you will have a penalty. If you are seeing a penalty, you can go back into the program under Other Tax Situations>>Additional Tax Payments>>Underpayment penalties and select start or update next to Underpayment Penalties. These questions are meant to help you apply for the exemption to the penalties.

Some exceptions to the penalty are

You had $0 tax liability in 2022
You paid 100% of your 2022 tax liability
You paid 90% of your 2023 tax liability
You or your spouse (if you file a joint return) retired in the past 2 years after reaching age 62 or became disabled and you had reasonable cause to underpay or pay your estimated tax late

Re: Why do I have an estimated tax penalty on line 38 of my 1040?

krauter — Tue, 27 Feb 2024 15:07:08 GMT

Thank you, Vanessa . You are helpful and awesome!

Re: Why do I have an estimated tax penalty on line 38 of my 1040?

mkapadia — Sun, 31 Mar 2024 13:53:46 GMT

Hello, I made an over payment on my estimated taxes that is greater than 90% of my Federal Taxes due (in fact, it was way over).

I did only make one payment last year but that's because all of my revenue was in Q4 2023.

I don't understand how or why TurboTax is still charging me an penalty? I went through questions but TurboTax was not able to eliminate the penalty.

Can you help? Thanks!

Re: Why do I have an estimated tax penalty on line 38 of my 1040?

JohnB5677 — Sun, 31 Mar 2024 14:57:44 GMT

The penalty is not only based on how much you pay, it also includes the timing.

Annualizing your Income can be used to reduce those penalties.

Since you had a major portion of your income at the end of the year, you may want to try this alternative.

As an alternative you can go to the main menu.

Select Tax Tools
On the drop-down select Tools
There will be 4 green boxes
Select Topics Search
Type Annualizing your income
This will bring you to the screen Underpayment Penalties
Continue through the questions and it will be posted to your return.

Please contact us again with any additional questions or to provide some additional details.

Re: Why do I have an estimated tax penalty on line 38 of my 1040?

mkapadia — Mon, 01 Apr 2024 10:55:53 GMT

Ok thank you. Unfortunately that didn't help to eliminate the penalty. I'll just have to make sure I don't make any late payments this year.

My income is not uniform though, so that's a challenge.

Does TurboTax have a tool that would help me calculate quarterly Estimated Tax payments? I have a mix of W2 and freelance (via single member LLC) income.

Thank you!

Re: Why do I have an estimated tax penalty on line 38 of my 1040?

ThomasM125 — Mon, 01 Apr 2024 22:20:36 GMT

Yes, you can calculate estimated tax payments in the federal section of TurboTax. Look for Other Tax Situations, then choose Form W-4 and estimated taxes which you will find under Other Tax Forms.