Does the underpayment penalty include the amount of the underpayment?Can I find out the amount to pay it?How do I avoid an underpayment in the future?

[ccleveland3939]

I need to avoid an underpayment penalty in the future? How do I figure out what to do?

[SharonD007]

No, the underpayment penalty doesn't include the underpayment. The underpayment penalty will be reported on your tax return (Form 1040) on line 38.  It will be included in your balance due or subtracted from your refund.

The federal tax system is a pay as you go system.  As you make money, you have to pay taxes on that money. You may have an underpayment penalty if you didn't have enough taxes withheld from your income throughout the year on your W-2 or if you're self-employed and you didn't pay enough estimated taxes.

To try to reduce or eliminate it, review the TurboTax article Why am I getting an underpayment penalty?

For more information, refer to the TurboTax help article Guide to IRS Tax Penalties: How to Avoid or Reduce Them for tips to use in the future.

You can contact the IRS to request a one-time abatement of your underpayment penalty. For individual tax returns, call 1-800-829-1040, 7 AM - 7 PM Monday through Friday local time.

[Mike9241]

There will be no federal penalties for not prepaying enough taxes for 2025 if withholding

1) and timely estimated tax payments equal or exceed 90% of your 2025 tax or

2) and timely estimated tax payments equal or exceed 100% of your 2024 tax (110% if your 2024 adjusted gross income was more than $150K) or

3) the balance due after subtracting taxes withheld from 90% of your 2025 tax is less than $1,000 or

4) your total taxes are less than $1,000

the lower of 1 or 2 are your required annual tax payments. 1 is difficult to know until the year's end so generally option 2 is the safer option. under the simplified method 25% of the estimated taxes must be paid in each quarter by 4/15, 6/15, 9/15, and 1/15/26.  unless you can show otherwise 25% of your annual withholding is assumed to occur in each period. 

failing this and being subject to penalties you can use the annualized installment income method. 2210 page 3. this requires knowing your income and deductions thru 3/31, then 5/31, then 8/31. 12/31 comes from your return. if you can increase withholding to meet any exceptions then paying estimates is not required. 

https://www.irs.gov/pub/irs-pdf/f2210.pdf   

if you have a state income tax their laws will vary.