topic Last year I had a change in status to 'Retired'. I don't think I should owe a penalty for just $362 of underpayment? in Retirement tax questions

Last year I had a change in status to 'Retired'. I don't think I should owe a penalty for just $362 of underpayment?

marvraab — Tue, 17 Feb 2026 08:00:05 GMT

Should owe a penalty for just $362 of underpayment when I had a change in status?

Re: Last year I had a change in status to 'Retired'. I don't think I should owe a penalty for just $362 of underpayment?

xmasbaby0 — Tue, 17 Feb 2026 13:10:30 GMT

Not sure what you mean. "Retired" is not a filing status. You only enter "retired" as an "occupation" if you want to use it; the IRS does not use your occupation in any way that affects your tax due or refund.

Re: Last year I had a change in status to 'Retired'. I don't think I should owe a penalty for jus...

Vanessa A — Tue, 17 Feb 2026 13:17:17 GMT

Yes. You can still owe a penalty when you have an underpayment due to change in status. However, you can request to have the penalty waived if the underpayment was due to a reasonable cause.

" If you have an underpayment, all or part of the penalty for that underpayment will be waived if the IRS determines that: • In 2024 or 2025, you retired after reaching age 62 or became disabled, and your underpayment was due to reasonable cause (and not willful neglect);"

The underpayment may also be avoided if:

You paid 90% of the tax that you owe for the current year.
If the current taxes paid are equal to 100%, (110% for higher incomes) of your taxes owed the prior year.
The IRS also says you can probably avoid the penalty if the amount you owe is less than $1,000..

For more information, see, Guide to IRS Tax Penalties: How to Avoid or Reduce Them.

To do this in TurboTax you will select the following:

Federal
Other Tax Situations
Underpayment Penalty
Answer the questions and follow the instructions to determine if you can get a waiver from the penalty.