I made estimated tax payment of 120% of 2018 California taxes in a timely manner. Turbotax, however, is calculating an underpayment penalty on my 2019 taxes. I cannot find the safe habor to eliminate the penalty. Am I missing something? Should I just pay the penalty?
You followed these steps:
The program should be calculating for you. Please reply with what you are seeing for more clarity, if needed.
Do not understand AmyC advice below re TurboTax saying there is an underpayment penalty due even though 2108 CA est tax was paid on time. Advice points to the Federal section "Deductions & Credits" but MY copy of TurboTax Business version shows ONLY "Deductions" and nothing about "Credits". AmyC advice points to "Estimates and Other Taxes Paid" but NO such entry area exists in my copy of TurboTax Business. My copy shows a section for "Taxes & Licenses" (and that page lets me enter my CA est tax payment OK, but I'm still getting TurboTax telling me I owe more to CA.....)
How do I solve MY problem with TurboTax making an underpayment penalty estimate?
TurboTax Premier - form 5805 Part II line 6
This box should show the tax from 2018 or 110% of that bill. Instead it repeats the amount in line 2.
If you click on the box in line 6 it will take you to what should be the source - The California Carryover Worksheet line 2 which is correct, but that is not what is transferred to form 5805!
This is costing be more than $7,000. Please fix!!!!!
Line 2 on the California Carryover Worksheet should transfer to form 5805 Part II line 6, but it doesn't.
I have the same problem and it is a bug that needs to be fixed. The problem is in Form 5805 part II line 5. That number is not correct! It says it is coming from California Carryover Worksheet line 2, but it isn't the number that is there. (That number is correct.)
I too put in much more than the 110% required. We sold our house and owe lots of tax, but not an underpayment penalty.
HOW DO WE MANAGE TO REPORT THIS AND GET IT FIXED???
I am using Home and Business. I see:
Form 5805 : Line 5
If the California AGI is less than $1,000,000 ($500,000 if married/RDP filing separately) then from:
Carryover Worksheet P/Y Tax Liability
minus
Carryover Worksheet P/Y Tax on Lump Sum Dist
minus
Carryover Worksheet P/Y Excess CA SDI Tax W/H
Otherwise from Line 2:
Form 5805 Line 2
Do you have those carryover worksheets with information and they are not populating? Maybe the problem is in there?
I have no idea what you are talking about. Did you read what I wrote? The things you mentioned have nothing to do with populating 5805 Part II line 5. I think I explained the issue clearly before but let's try again.
Part II line 5 asks for THE TAX SHOWN ON YOUR 2018 RETURN. If your income is over $150,000 the amount should be 110% of the tax on your 2018 return.
Instead it is giving 90% of the tax owed on the 2019 return.
I have no idea what you are reading, but it has nothing to do with 5805 Part II line 5.
Please make sure you have the required carryover worksheet and you fall within the income limits.
Your 2018 liability has to be in the program in order for it to calculate anything. The only thing that shows last year's tax liability for CA is the Carryover worksheet- named Carryover Wks. If this is missing from your return, your program does not have the information from last year, therefore, it does the default of entering this year the second time. What I gave above was the exact method used by the program to calculate line 5 for Form 5805.
If your income is above those limits, then there is no other calculation, it goes straight to the default again. Your income may exceed those limits.
If your CA Carryover Wks is in the program, it should be carrying and calculating. Since yours is not, either the worksheet is missing, your income exceeds the limits, or something odd is happening. My worksheet shows and calculates correctly.
Filed without paying the penalty. Called FTB on another matter and was told my return was accepted and processed, and there was no penalty due.
AmyC,
I replied in another thread too -- I also think there is a bug with CA FTB 5805 calculations.
My Carryover Wks is present with correct TY2018 amounts.
My Federal and CA AGIs were both over $150K and I paid 100% (but less than 110%) of my TY2018 tax liabilities for both Federal and State. TT2019 correctly populated a Federal 2110 (and I used the annualized method to reduce the penalty). However, the CA FTB 5805 that is generated is essentially blank (yes, I have explicitly deleting it and letting it get regenerated). And the "Underpayment Penalty" is not even appearing in the State Interview. Clearly, the program is deciding I do not owe a penalty -- but I think it's wrong.
I even artificially forced my W-2 State withholdings to far less than 100% of my TY2018 liability, and the program still didn't generate a CA penalty.
I believe there is a serious bug here.
I'm having a similar problem. My e-file was rejected and even though I may have fixed the problem the program will not let me e-file again. I think I am required to e-file rather than mail.
I know where the problem is. On form 5805 I started to fill out the short method Part II lines 7-13 before I realized I needed to use Part III instead. For some reason Line 13 populated with the penalty from the annualized form and there are two values that seem to be missing on the dotted line. There are no instructions for those values on the program or on the FTB instructions.
@AmyC This is still a problem with the 2023 Premier version.
The carryover worksheet is present and shows the correct amount. However the number on Form 5805 line 5 (enter tax shown from 2022 tax return) is incorrect, it simply copies from Part II line 2. This caused a penalty to be calculated incorrectly.
I paid the penalty anyways and CA tax board sent me refund check. Nevertheless this should be an easy bug for Intuit to fix.