Accidently was categorized as Tax Exempt for 2020

[laurenp95]

I some how was categorized as tax exempt from Feb-Dec for just my federal taxes at work. I have already contacted them and there is nothing I can do to change it at this point. I am fully ready to pay the amount I will owe but do I just file like I normally do? Is there any penalty for not having the contributions come out in 2020? Please let me know anything I should be aware of in this situation.

[DJS]

So if I understand correctly, your employer failed to withhold taxes from your wages or salary. You can still file a fourth quarter estimated tax form (form 1040-ES) and pay an amount that you calculate you may owe for the year. You may be hit with a late payment penalty for the first 3 quarters. You can get a paper copy of the 1040-ES here: https://www.irs.gov/pub/irs-pdf/f1040es.pdf 

The Q4 payment is due by January 15, 2021

[laurenp95]

Thank you! Do you know what these penalties usually run? Also will the IRS let me know what they are? 

@DJS 

[DJS]

The penalty will be calculated in TurboTax based on the amount and date of payment that you enter in the section on estimated taxes that you paid. 

The late payment penalty is 0.5% of the tax owed after the due date, for each month or part of a month the tax remains unpaid, up to 25%. You won't have to pay the penalty if you can show reasonable cause for the failure to pay on time. 

• We calculate the penalty separately for each required installment. The number of days late is first determined and then multiplied by the effective interest rate for the installment period.

• See Publication 505 PDF, Tax Withholding and Estimated Tax for more information.

[laurenp95]

Thank you. @DJS 

What constitutes reasonable cause usually? And do you have to make a case to them? I did not have intention of doing this and must have accidentally selected the exempt button. My employers electronic form is very confusing compared to the actual form. I want to remediate this as quickly as possible. 

Is this something that Turbo Tax can help with when I go through my taxes? Utilizing the Live feature? Or do I need to select a specific service?