Hi, I paid everything TurboTax said I owed, yet IRS saying I still owe $433.50 for "Failure to pay proper estimated tax penalty." What happened?

[trob1111]

I paid everything I was told to pay after completing my taxes with TurboTax.  I just got a letter saying I owe $433.50 for "Failure to pay proper estimated tax penalty."  Can someone please explain what I did wrong or what TurboTax did wrong?  

[fanfare]

Since TurboTax calculates the bulk of your penalty, that's a pretty large added penalty. You must have a large income.

[Rainman12]

Nobody did anything wrong. IRS can't assign accurate interest/penalties until they've accepted your initially due amount. Way to avoid: Pay 110% of last year's taxes in estimated payments/withholding earlier in the year.

[trob1111]

Thank you.  I understand there are taxes and penalties when you don't "pay as you go."  I just thought TurboTax had already added this in during the Q&A process that gathered the data for completing my return.  And I am not sure I understand why the IRS would need to wait to assign accurate interest/penalties until after accepting my return.  Aren't these fixed percentages?  My main point is that TurboTax never indicated that this extra bill was still looming.  I wished they had simply informed me my tax payment was not complete.  I was not delaying paying my estimated tax because I was lazy, I had been laid off and had was barely making ends meet with a new job.