penalty for underpayment of estimated tax

[SCOOTER512]

I DO NOT OWE ANY MONEY TO THE IRS FOR TAX YEAR 2000. HOWEVER I WAS LATE ON AN ESTIMATED PAYMENT. DO I HAVE TO FILE FORM 2210?

[VolvoGirl]

Did it give you an underpayment penalty on 1040 line 38? 

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

[phildonnia]

You may owe a penalty even if you are fully paid at the end of the year.   The penalty accrues from the due date until you pay the amount owed on that due date.  If it's a few days late, the penalty will likely be very small.

In any case, you only have to file Form 2210 if you are not using the default method for calculating the penalty.  The default method assumes that your tax liability and withholding are allocated equally to all four periods.  If that is how you want the penalty calculated, you don't have to file Form 2210.  The IRS will do it for you and send you a bill.   (You are perfectly free to use Form 2210 to calculate the penalty yourself, but you don't have to file it).

If you want to allocate withholding according to when you actually paid it, or allocate tax liability according to when you actually incurred it, then you need to file Form 2210, and check box D or C.