This was the first time I had to pay estimated taxes, on my 2020 tax return, I followed the payment schedule generated by TurboTax at the end which were the estimated tax vouchers. I paid all of the amounts before the due date each quarter, but I was hit with a ~$150 penalty when I recently filed for 2021. My AGI for 2021 was not >$150K, so paying 100% of the previous year's taxes should've prevented any penalties, I am trying to figure out if I did something wrong or is on TT's end. Also, what amount is being defined as "100% of previous year's taxes" is it "Total Tax" or "Payment Due (which is after any payments/credits)? If it's the former, it seems like TurboTax did it incorrectly and divided my payment due by four for my vouchers, which means I didn't pay enough.
If you paid 100% of last years taxes, then you need to fill out form 2210 in TurboTax as you would be exempt from the penalty.
To fill out form 2210 in TurboTax select the following:
Also, TurboTax bases the payment vouchers on your entries or your prior year taxes. The best way to calculate if you are self-employed is to use QuickBooks Self-Employed and pay what is calculated as due at the end of each quarter.
If you paid 100% of last years taxes, then you need to fill out form 2210 in TurboTax as you would be exempt from the penalty.
To fill out form 2210 in TurboTax select the following:
Also, TurboTax bases the payment vouchers on your entries or your prior year taxes. The best way to calculate if you are self-employed is to use QuickBooks Self-Employed and pay what is calculated as due at the end of each quarter.
@Vanessa A , oh no, I was used to TT Premier hand holding me throughout the process, I don't think that form popped up when I added my estimated payments. I've already submitted my tax return, is that something I can send in separately? If I don't send it at all, will IRS eventually refund me? The penalty amount isn't too big of a deal, so I can wait, but it's good to know where I messed up.
Edit - I double checked and I see Form 2210 for my state. It seems like I was correct, TT did the estimated voucher payments on "Total Payment (after deductions/credits)" and not "Total Taxes", that's where the discrepancy is.
Many people tend to skip the walk through for other tax situations. You can Amend Your Return to include form 2210.