I can't figure out why Turbotax Home & Business is saying in Review that I owe an estimated tax underpayment for 2021. My income is much less than in 2020, was not episodic, my quarterly estimated tax payments were high, consistent and on time, I am owed a considerable Federal refund according to Turbotax, so, without knowing my specific situation, can anyone explain why Turbotax is telling me in the Review I owe an estimated tax underpayment penalty of $100 and have to declare the date when I will separately pay it to the IRS, despite being owed much more than that in refund?
Generally, you'll have to pay an underpayment penalty for 2021 if you owe more than $1,000 in taxes (after taking withholding into account) and:
* Your taxes withheld don't cover at least 90% of your 2021 tax liability, or
* Your taxes withheld aren't at least 100% of your 2020 tax liability if your AGI is up to $150,000 or 110% if your AGI is more than $150,000. (The amount is $75,000 if you're married filing separately.)
You stated that you have no owed tax liability, made all four estimates, and did so on a timely basis. In addition, your income was much lower than in 2020. In your situation, please elect out of TurboTax calculating a tax penalty on your return.
To change your election, please follow the instructions below:
Once you select that option, there will only be no entries on Line 38 of your 1040.
2021 TurboTax has not yet been updated to correctly calculate an underpayment penalty. Form 2210 is scheduled to be updated on 02/24/2022.