I paid more in federal taxes in 2017 than my total tax was in '16,Iwill get a refund.Part of my payments for '17 was a prepayment made in Oct'17,Why must I pay a penalty?

ussdz — Thu, 06 Jun 2019 16:12:17 GMT

Tip: To reduce or possibly even eliminate your underpayme...

LeeM — Thu, 06 Jun 2019 16:12:18 GMT

Tip: To reduce or possibly even eliminate your underpayment penalty, search for "annualizing your tax" (use this exact phrase) inside TurboTax. This will take you to the underpayment penalty section, and we'll take you through the steps to possibly reduce your underpayment penalty. (Note: If you don’t see "Jump to annualizing your tax" make sure you’re in your return, and not still on the Tax Home page.)

Underpayment penalties are assessed if you don't withhold or pay enough tax on income received during each quarter.

In fact, it's entirely possible to get hit with an underpayment penalty even though you paid your tax bill in full by the April deadline or are getting a refund.

Here's an example: Joe is self-employed and estimated next year's tax bill at $20,000. Rather than making 4 quarterly payments of $5,000 apiece, he chose to pay $500 in each of the first 3 quarters, and the remaining $18,500 in the fourth quarter.

When he filed, his actual tax bill came to $17,270 and he got a $2,730 refund. However, he got hit with the underpayment penalty because he underpaid his estimated tax in the first 3 quarters.

topic I paid more in federal taxes in 2017 than my total tax was in '16,Iwill get a refund.Part of my payments for '17 was a prepayment made in Oct'17,Why must I pay a penalty? in Get your taxes done using TurboTax

I paid more in federal taxes in 2017 than my total tax was in '16,Iwill get a refund.Part of my payments for '17 was a prepayment made in Oct'17,Why must I pay a penalty?

Tip: To reduce or possibly even eliminate your underpayme...