Taxes on 1099-INT

[TaxNoob18]

Good to know we're on the same page now @BillM223

Interest rate increase in 2023 caught me off guard. I should've increased my withholding in 2023 to cover huge interest income. I made no withholding change to my salary last year. Now I have to worry about 2023 underpayment and penalty.

I will definitely increase my withholding in 2024 to cover my interest income tax.

[TaxNoob18]

I'm doing my income taxes right now. Just finished entering all my income (W2, 1099INT/DIV). Turbotax tells me there is a $51 underpayment penalty (Federal). It does offer options to lower the penalty. I take a look at the options and it sounds very complicated. Annualized is one of the options to lower penalty. I don't remember the rest. I'd rather pay $51 penalty. It isn't that bad. I was worried that the penalty will be in the hundred dollar neighborhood.

[VolvoGirl]

And the underpayment penalty is just an estimated amount.  Turbo Tax can't calculate it.  The IRS will calculate it and might send you a refund or a bill for more.  

[TaxNoob18]

Why doesn't Turbotax disclose that information you mentioned? How would I know if the IRS bill me for the remaining?