Federal Tax Penalty

[mw80]

2024 was the first year I had to pay a Federal Tax Penalty. I do not have any taxes taken out of my income sources because I usually owe less than $1000 in Federal taxes and I prefer to pay rather than get a refund. Having the minimum amount withheld from my Social Security payment would put me into a refund category.  Is there a Federal tax amount owed that triggers the penalty? 

[Vanessa A]

Yes.  More than $1,000 will trigger a penalty. So if you usually owe less than $1,000 but this year it was more than $1,000, you would owe a penalty.  Since you did not pay any taxes in you would not qualify for the paid 100% of last years tax liability.  

If you recently retired (within the last 2 years) you may be able to claim the penalty waiver by filling out form 2210.  

You will find this under 

1. Other Tax Situations
2. Additional Tax Payments
3. Underpayment penalties 

Also, when you get towards the end of the return, you should be asked by TurboTax if you want to apply for the penalty waiver.