I paid $1800 and had no notification of a remaining tax liability with Turbotax last year. How do I know if this is true and what should I do? Any help would be greatly appreciated.
Who says you have a liability and a penalty? The tax program or did you get a letter from the IRS?
TurboTax has no way of knowing that you paid the tax that you owed, or when you paid it. TurboTax does not get any information from the IRS about payments that you make. Therefore, TurboTax will always show the amount that you owed when you filed your tax return. If the IRS is not asking you for payment, then you don't owe anything.
What line on the 2021 tax return it this "penalty" showing up ???
You can peek at only the Federal form 1040 and the summary of the state info by going here:
1) lower- Left side of the screen...click to the left side of the "Tax Tools" text selection.
2) then select "Tools"
3) then select "View Tax Summary" from the pop-up
4) then back to the left-side and "Preview 1040"
Then hit the "Back" on the left side to get back to your tax entries.
To view your entire return using the online editions (including the state) before you file, you will need to pay for your online account.
To pay the TurboTax online account fees by credit card, without completing the 2021 return at this time, click on Tax Tools >>> Tools and then Print Center. Then click on Print, save or preview this year's return. On the next page, to pay by credit card, click Continue. On the next screen it will ask if you want Audit Defense, if you do not want this option just click on the Continue button. The next screen will ask for all your credit card information so you can pay for the account.
Turbo Tax doesn't know if you owe more for 2020. Or even if you paid the tax due. You might be seeing a penalty for 2021 for not paying in enough during the year.
If it is on your 2021 return line 38.....
It's not for owing on a prior year. It's for this year.
That is not for filing or paying late.
If you do not pay in enough tax from withholding and estimates, you may have to pay a penalty for underpayment of estimated tax. Even if you are getting a refund you can still owe a penalty for not paying in evenly during the year. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. It is included in your tax due or reduces your refund.
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
Thank you Volvo Girl. Your answer was correct and helped greatly.
Thanks Critter-3. That specific information will help me track down the problem quickly.