Questions regarding by when 'underpayment penalty' needs to be paid

[ahmadka2]

So this year apparently I have an 'underpayment penalty' which I've never seen before. Fortunately it's not that high. When going through the underpayment penalty section, I'm asked the following:

Enter the date you paid or will pay your balance due. We use this date to determine the underpayment penalty amount you'll be charged.

If the balance due won't be paid before the unextended filing deadline of this return, you can leave this blank.

If I leave this date field blank, then a $74 underpayment penalty is calculated for me, making my final total tax bill to be $4929. However if I put a date here, say 3/27/2025 (4 days from writing this), then the underpayment penalty goes a little down to $69, making my total tax bill to be $4924.

Regarding above, I have a couple of questions:

1) If I indicated 3/27/2025, do I need to pay only the $69 by then, or the entire $4924 tax bill by that date, in order to not default or be in debt ? I'm fine with paying the whole amount but I just want to confirm the meaning here.

2) Is there any harm in paying the $69 (or the entire tax bill) earlier than the date indicated here (i.e. 3/27/2025) ? Or do I *have* to pay either amount *exactly* on 3/27/2025 ? Also if I pay it earlier than the date I indicated, will the IRS issue any refund to me if the underpayment penalty reduced based on the actual date I paid the $69 ? For example, for 3/27/2025 its $69, but let's say I paid earlier on 3/25/2025 for which it's $66 (hypothetically). In this case will IRS issue a $3 refund or something ?

3) Assuming I pay the $69 or entire tax bill by the date I indicated (i.e. 3/27/2025), I should NOT get any bill from IRS for any remaining underpayment penalty (or interest on any unpaid amount), right ? Because TurboTax already calculated it and I already have paid it by the date that TurboTax used to calculate the penalty ?

4) Lastly, I want some clarification regarding what would it mean if I *don't* enter a date here. That is, suppose I leave this date field blank, in which case the underpayment penalty becomes $74 in my case, and my total tax bill becomes $4929. Also as we all know, tax filings and payments of any remaining taxes in general are due by 4/15/2025. Now suppose I file my taxes and pay the $4929 total tax bill amount at anytime before 4/15/2025 to meet the deadline. In this case since I would have paid the $74 underpayment penalty (which was included in the $4929 amount), will I still receive any bill later from the IRS for any remaining underpayment penalty or interest on it ?

Would request you to please answer each question separately in the same numbered format, rather than combining answers to all questions together in one explanation.

[BrittanyS]

You must pay the entire tax bill by the date entered for the penalty reduction to occur.  You can pay the balance earlier than 3/27/2025. If you overpay the penalty, the IRS will refund any overpayment amount.  Yes, if you pay the entire balance by the due date entered on the return, you will not get a second bill for the penalty, as you have already paid that balance.  You will only be billed an additional amount if you exceed the date you entered for when you will pay.  If you do not enter an amount, the software assumes the entire tax bill will be made on 4/15/2025.  If you pay by 4/15/2025, you will not receive an additional bill for the amount due.  You will only receive a bill for the remaining balance if your payment is made after the 4/15/2025 deadline.  If you do not put a date in and pay before the 4/15/2025 deadline, the IRS will refund any penalty difference for paying early.