topic Turbo Tax estimated tax vouchers from 2018 caused penalty for 2019 in Deductions & credits

Turbo Tax estimated tax vouchers from 2018 caused penalty for 2019

chamberlainke — Fri, 27 Mar 2020 09:00:07 GMT

I have used Turbo Tax Home & Business version for 5 years. Each year it prints out estimated tax vouchers for the following year. When I filed my 2018 taxes I applied my state tax refund to 2019 estimated taxes and Turbo Tax printed out 2 vouchers for the remaining estimated tax amount for 2019. I paid those estimated taxes per the 2 vouchers. Now I am completing my 2019 taxes and after entering those 2 payments it says I owe a penalty of $22. What is going on? I paid what Turbo Tax said I was supposed to. I can't change the penalty amount to 0. What can I do to fix this as I shouldn't have any penalty. Thank you.

Re: Turbo Tax estimated tax vouchers from 2018 caused penalty for 2019

DianeC958 — Fri, 27 Mar 2020 13:24:18 GMT

The estimated tax payments that TurboTax gives you are based on your income from the previous year. If during the year your income increases the amount of your estimated payments also need to increase. TurboTax does not have this information.

By the same token if you income decreases you can decrease the amount you are paying in estimated tax.

It is important to keep track of changes in your income and adjust your payments accordingly.

Re: Turbo Tax estimated tax vouchers from 2018 caused penalty for 2019

chamberlainke — Fri, 27 Mar 2020 14:22:27 GMT

Thank you, but my income did not go up or down, it stayed about the same. I didn't find out until I went to file my 2019 taxes that one of my dependents no longer qualified and this caused my taxes to go up. I guess that I could stay up to date on tax law to a degree that I would know that change was coming, but that's why I pay Turbo Tax to do my taxes for me.

To be clear I have no issue with paying the extra tax, just the penalty - because a change I didn't know about and that my tax software that I paid for didn't predict shouldn't be penalized. There is no place in the Turbo Tax software for me to explain what happened, and I can't remove or dispute the penalty. I want Turbo Tax to improve on this so that people aren't getting blindsided with penalties they can do nothing about.

Re: Turbo Tax estimated tax vouchers from 2018 caused penalty for 2019

JohnB5677 — Sun, 29 Mar 2020 19:56:58 GMT

If you didn’t pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax.

Generally, most taxpayers will avoid this penalty if

they owe less than $1,000 in tax after subtracting their withholdings and credits, or
if they paid at least 90% of the tax for the current year, or
100% of the tax shown on the return for the prior year, whichever is smaller.

If this is the first time you've had a penalty, The IRS may waive it. I suggest you contact your local IRS office and see if they can help. To find a Local Office: Local IRS Offices