Late Payment Penalty After Paying More Than 110% Of Prior Year's Tax

[Romper]

TurboTax 2025 Desktop, Windows 11

TurboTax is showing a Federal late payment penalty for 2025 even though I paid more that 110% of my 2024 tax due.

Details:

1. I withheld Fed and State taxes from my RMD for 2025. Withholding from an RMD is considered as being received equally during the year.
2. The withholding was not quite enough to exceed 110% of my 2024 tax due so I made a regular estimated tax payment on January 5, 2026. The total of the two exceeded 110% of the 2024 tax due.
3. Shouldn't the sum of the RMD withholding and the Jan 5 payment have prevented the late payment penalty?
4. The cause of the penalty is the Jan. 5 estimated payment as it is showing in the Form 2210 Underpayment Worksheet.

Looking for a way to remove the late payment penalty.

Thanks in advance.

[baldietax · Accepted solution]

go to Forms mode Open Form and put 2210 in the search bar to bring up the Form 2210 calculation which is generating the penalty

even if you meet the safe harbor in total for the year if it wasn't even over the year you could have an underpayment for one of the quarters

if your income was uneven and in particular later in the year you can adopt the Annualized Income method to line up uneven ES payments with uneven income.  Go to Other Tax Situations / Underpayment Penalties to work through that or other options on Form 2210.,

[Romper]

Thanks, the Estimated payment on Jan 5 is the cause of the penalty.

Doing the annualized income is worse than the penalty ☹️

[Romper]

Lesson learned. Next time take additional from the IRA to cover the tax shortfall rather than an Estimated tax payment.