Billed by CA FTB for underpayment of Estimated Tax Penalty

kmd — Tue, 10 Mar 2026 05:55:25 GMT

Hello, TT for 2021 CA 540 (joint return) calculated a $5 penalty for underpayment of estimated taxes. However, now we just received a bill from CA FTB for an additional $141, saying that "Estimated Tax Penalty" was $146 and not just $5. Why did TurboTax tell us the penalty was only $5? It generated Form 5805, but it says only $5 penalty owed.

Note that our monthly income in 2021 was unusual in that I retired in early 1Q2021. Secondly, my spouse started a new job and did not have income until late 1Q2021. In addition to this, I had additional income from inheritance of stock mid-2021, which paid out dividends in 3Q2021 and 4Q2021. And then I also had an inherited K-1, but that was offset by a loss. In addition to withholding, I paid estimated taxes to CA but apparently not enough. Taxes owed in 2021 were $1381 plus the $5 penalty. But now CA is billing us for $141 more. They don't explain why. Total tax liability was $13839, and we paid $6801 in withholding and $5657 in estimates, total. So, 90% of $13839 = $12455.10. We paid $12458, so paid more than 90% owed. Yet, we are we getting billed a $146 penalty instead of the $5 indicated by TurboTax? I don't understand why TurboTax thought we only owed $5 instead of $146. Would annualizing our income have made a difference since it was spread unevenly in 2021? Thank you.

Re: Billed by CA FTB for underpayment of Estimated Tax Penalty

Mike9241 — Thu, 04 Aug 2022 02:03:32 GMT

many times the dates for estimated tax payments entered by the taxpayer don't match what the feds or state use. if CA did not send you a calculation call them. there should be a number on the notice.

we have no way of knowing if the annualized income method would reduce the penalty. you would have to complete the calculations.

topic Billed by CA FTB for underpayment of Estimated Tax Penalty in Get your taxes done using TurboTax

Billed by CA FTB for underpayment of Estimated Tax Penalty

Re: Billed by CA FTB for underpayment of Estimated Tax Penalty