Penalty on Estimated Tax

[murtrie227]

I did an $80K rollover from 401-k to Roth IRA in 4Q23.  I paid the correct Estimated Tax in 4Q23.  TurboTax is adding a $390 Penalty.  I think TT is assuming I received $20K per Quarter, so I should have paid Est Tax quarterly.  How can I correct this and get rid of Penalty?

[dmertz]

To eliminate the penalty you must annualize income on Schedule AI of Form 2210.   TurboTax will ask you if you want to annualize income.

[VolvoGirl]

You might be able to eliminate it or at least reduce it.  You can go to Federal Taxes tab or Personal tab, under Other Tax Situations and select Start by the Underpayment Penalties. You will answer a series of questions that may reduce or eliminate the penalty. Or you can elect to have the IRS figure the penalty for you.  It's form 2210.

It's under

Federal or Personal (for Home & Business Desktop)

Other Tax Situations

Additional Tax Payments

Underpayment Penalties - Click the Start or update button