Does TT raise my tax liability due to underestimated tax payments?

[BigC1943]

Am I paying more taxes now as a result of my failure to pay sufficient estimated taxes.

[VolvoGirl]

You can owe more on your tax return if you haven’t paid in enough from withholding and estimates.   You can also owe an underpayment penalty if you end up owing too much.

If you do not pay enough tax, you may have to pay a penalty for underpayment of estimated tax. Even if you are getting a refund you can still owe a penalty for not paying in evenly during the year.  Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. It is included in your tax due or reduces your refund.

If you get a penalty 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.

[DoninGA]

Also note that you can still make a 2024 estimated tax payment at any time on or before January 15, 2025.

Go to this IRS payment website - https://www.irs.gov/payments

[BigC1943]

Thank you!

[rjs]

If TurboTax is adding an estimated tax penalty to your tax, you will see the penalty on line 38 of Form 1040 or Form 1040-SR.

[BigC1943]

Thank you!!