1. If you have been assessed an underpayment penalty, then you can see if you may qualify for an exception to the penalty. You may want to look into these exceptions if this is the first year you owed tax and it is not a normal occurrence (i.e. you had one time income this year). You may also be able to reduce any penalties owed by using the Annualized Income Method (method for taxpayers whose income is uneven throughout the year such as a ski resort).
You can review the underpayment penalty section by using one of the following two methods:
First, you can perform a search within the program.
- Log in and click Take Me to My Return
- Use the search icon in upper right-hand corner (magnifying glass icon)
- Search for “underpayment penalty”
- Click the “Jump to underpayment penalty” link
- This will take you directly to the section of the program where you can review the underpayment penalty and possibly qualify for an exception
Second, you can use a step by step method of getting the to same place above
- Log in and click Take Me to My Return
- Click Federal Taxes
- Select Other Tax Situations
- Scroll down to Additional Tax Payments
- Click start/edit next to Underpayment Penalties
2. You can choose to have the IRS figure out your penalty. Go through the above section for Underpayment Penalty and during that interview, one of the questions will ask if you would rather have the IRS calculate your penalty. Say Yes, and this will override any penalty TurboTax has calculated. If you are found liable for a penalty, the IRS will send you a bill for this amount later. I would recommend you look through the possible exceptions first.
