Does turbo tax automatically add underpayment penalties to my amount due? Or we are supposed to make a separate manual payment?

[az148]

Confused because Line 37 is the Amount Owed and Line 38 is the Estimated Tax Penalty, which means it's not added to the Total Amount Due? The IRS only charged me Line 37 

[rjs]

The penalty on Form 1040 line 38 is included in the amount you owe on line 37. That is what the IRS instructions say to do.

Line 37 is the total tax on line 24 minus the total payments on line 33 plus the penalty on line 38.

[az148]

oh the software automatically adds that in?

[VolvoGirl]

Yes.  The penalty on line 38 IS INCLUDED in line 37 tax due.  You can double check it.  Line 37 should be line 24-33.  Then add line 38.   And It's very common and normal and expected for the IRS or state to bill you for more or send you a refund.  You can even leave line 38 blank and let the IRS calculate it for you.

Sounds like you already filed.  For the future…..

If Turbo Tax calculates a penalty on 1040 line 38…..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