I need to split my payments because I owe a large amount to the IRS and need time to gather the funds. However, the underpayment penalty is much smaller, and I don’t want it to keep accruing interest. I’d like to pay the penalty now and the remaining balance a month later (right before 4/15/2025).
Which option in Turbotax Online should I select in the screenshot I attached to make these payments separately at different times?
You can't make separate payments.
However, as long as you pay the full amount by 04/15/2025 you won't be charge any interest on the underpayment penalty or amount due. The IRS charges underpayment interest when you don't pay your tax, penalties, additions to tax or interest by the due date.
I just change the Date of Payment from today to 4/14/2025 (as shown in the attachment) and it increases $400 for the underpayment penalty for me and that is exactly the reason I want to make separate payments. Can you advise how to achieve that?
The easiest solution to make payments is to use IRS Direct Pay. You can specify to which tax and tax period you want to apply the payment.
To record any additional payments in TurboTax that you make before filing, go to the Estimates and Other Taxes Paid section in the Federal return.
Any payments you enter in the Federal section should then be accounted for when you complete Form 2210.