CP30 notice - why?

[lauragian]

I received a CP30 notice saying I owe $197.  I used Turbo Tax to do my return, had it checked at least three times and thought all was well.  I paid what Turbo said I owed ($5,575).  My question is this:  Why is it that Turbo tells me everything seems ok, but I still get a notice from the IRS?  I am 64 years old and this is the second time using Turbo Tax to do my taxes and the second time I receive such a notice.  It seems like the Turbo Tax system is a failure.  

[Bsch4477]

Does the notice read that you have an underpayment penalty? TurboTax has no control over that. 

[lauragian]

It says, "We reviewed you estimated tax penalty computation for the tax period ended 2024 and found an error.  Our correction of this error increased the penalty..."

Sounds like the Turbo Tax system failed to determine the correct taxes that I owed.  If anyone has insight, please share.  Thank you.

[Bsch4477]

What is on line 38 of your 1040 and how does it differ from the IRS amount?

[Bsch4477]

What is on line 38 of your 1040 and how does it differ from the IRS amount? Does your letter explain the discrepancy?

[baldietax]

to avoid penalty you needed to have paid thru withholding or 'timely' (usually quarterly) estimated taxes, the smaller of 100% of 2023 tax (110% if AGI > 150k), or 90% of 2024 tax - the 'safe harbor' amount.  this calculation is performed on quarterly basis by default, so any issue with timing of estimated taxes can affect penalty even if total amount paid was sufficient.

IRS recalculates the penalty based on information in their system so any discrepancy or adjustment could cause them to assess a different penalty e.g. estimated tax payments input into TT, 2023 AGI/tax information carried over or input into TT can affect the 'safe harbor' calculation of the minimum you needed to pay thru the year.

if you are on desktop in Forms mode double-click on line 38 and again on the worksheet to show Form 2210 calculations that TT made based on these inputs.  For online this may be in the PDF with 'all forms and worksheets'.

to confirm your estimated tax payments as IRS knows them you can check payment history on irs.gov.