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en25adr
Returning Member

i just did my taxes and it shows I owe $145 in taxes & $11 in penalty/interest. I received some money from a lawsuit and sent in an estimated tax payment in the same quarter I received the money. Why was I charged a penalty?

 
2 Replies
LeonardS
Expert Alumni

i just did my taxes and it shows I owe $145 in taxes & $11 in penalty/interest. I received some money from a lawsuit and sent in an estimated tax payment in the same quarter I received the money. Why was I charged a penalty?

"Underpayment penalties are assessed if you don't withhold or pay enough tax on income received during each quarter.

In fact, it's entirely possible to get hit with an underpayment penalty even though you paid your tax bill in full by the April deadline or are getting a refund". Ref: TurboTax

 Why am I getting an underpayment penalty

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VolvoGirl
Level 15

i just did my taxes and it shows I owe $145 in taxes & $11 in penalty/interest. I received some money from a lawsuit and sent in an estimated tax payment in the same quarter I received the money. Why was I charged a penalty?

Did you enter the estimated payment with the date paid?

 

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

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