Fed Penalty withholding only?

3 replies
37 views

Is Fed tax return Penalty determined only by paycheck tax withholding, ignoring Estimated Tax payments although having a net refund?

Ask the Experts - W-4 II - May 2024

Bsch4477

Level 15

The penalty is related to what you owe after subtracting tax withheld and estimated payments made well as any credits.

ash49Author

Level 2

My wife works and I am a retiree with RMD and Soc Sec Income. We also have investment income. For 2023 tax year, we had both withholding and quarterly Estimated Tax payments with the result that we had a net fed tax refund. However, Turbotax said we owed a fed Tax penalty because we did not have enough withholding! Why is penalty determination done on the basis of Withholding ONLY and not also taking into account Estimated tax payments?

KimberW

Alumni - Intuit

This follow-up question has been answered in your subsequent post:

Underpayment Penalty based only on withholding?

Thank you for participating in this event!-- KimberW. **Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"