Received a letter penalty for failing to pay 2025 estimated taxes

[california1977]

Fellow taxpayers

I filed my 2025 taxes jointly for myself and my wife. During the filing, Turbotax mentioned that they guaranteed tax return accuracy. However, I recently received two letters indicating that I failed to pay 2025 estimated taxes, one letter for each of us with the same amount. So, my questions are:

1. Can I reach out to Intuit since they made a mistake in not showing up estimated tax penalty while filing returns? Will they pay for it since it's a mistake made by their software?
2. If I do end up paying, do I need to pay for both me and my wife or just paying for one us is good enough since it was filed with "Married filing jointly"

thanks,

[SharonD007]

Assuming that you are referring to an underpayment penalty. 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 or if you're self-employed, you didn't pay enough estimated taxes.

You can get hit with an underpayment penalty in the situation you described because you didn't pay the estimated quarterly taxes when they were due in 2025 . The IRS imposes an underpayment of estimated tax penalty based on the amount, timing, and interest rate of the underpayment. 

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.

Refer to the TurboTax article IRS Tax Penalty Abatement and Relief for more information.

When the taxpayer file MFJ, the IRS send the letters to both parties.  Both taxpayers don't need to pay.

TurboTax guarantees accurate calculations so TurboTax make an error, they will pay you the penalty and interest but limitations apply.  For more information, review the Intuit Terms Of Service For TurboTax Online Tax Preparation Services. 

Refer to the TurboTax article How do I submit a claim under the TurboTax 100% Accurate Calculation Guarantee or 100% Accurate, Exp... for information.

[baldietax]

Just to add from what is described, the penalty itself is not caused by a Turbotax error.  It is valid filing option to leave Line 38 on 1040 blank and IRS will calculate the penalty independently either way and send you a letter.  You just need to pay it by the date on the letter to avoid additional fees.

Turbotax uses the same calculation as IRS on Form 2210 but if the IRS has different data not provided to Turbotax e.g. any adjustment to tax for 2024 or 2025, that could affect the safe harbor calculation.  Turbotax may have validly determined no penalty was due based on the information provided.

If you are using desktop you can see the Form 2210 calculations in Forms mode but 2210 is not in the forms list or PDF by default unless you have a filing exception.

During filing you can review 2024 information and work through penalty options under Other Tax Situations / Underpayment Penalty.

If your penalty was due to income late in the year e.g. a Q4 Roth conversion, you may be able to reduce the penalty by filing the Form 2210 Annualized Income method; without this the IRS assumes your income was even over the year so you are being penalized for underpayment back to Q1.  This is extra filing work so it depends how much penalty you incurred and whether this method would help.

[Mike9241]

TurboTax almost certainly will not pay your underpayment of estimated tax penalty. This is an amount you would have paid even if TurboTax had computed it. TurboTax computes this penalty unless you indicate you want the IRS to bill you. If you did not do this, then you entered something incorrectly in the app 

[california1977]

Thank you for the response! No, I did not choose to be bill directly and don't recollect being prompted that question either anywhere.

[VolvoGirl]

Do you have an amount on 1040 line 38?   If Turbo Tax entered a penalty on line 38 it is just an estimated amount.   Turbo Tax can not figure it accurately because they don't know exactly when the IRS or state will get your return and tax due payment.  It's very common and normal and expected for the IRS or state to bill you for more or send you a refund. 

If you did have a penalty on line 38 you could have asked about it and we can tell you how to reduce or eliminate it by filling out form 2210.   

[california1977]

Thank you for the response! I can see that on form 2210, none of the boxes A,B,C,D,E are checked and line Item "9" has "No" box checked, meaning I do not owe any penalty. I'm a W2 employee, so the income is fairly steady month over month. At times, there's bonus that appears in the account and that's the only variable part. I did not have any Roth conversion or any other sources of income.

What does it take to file form 2210 if I were to reduce/eliminate the penalty ? Can I do it through TT ?

[california1977]

Thank you for the response! Form 1040, line 38 does not have any numbers mentioned there, so I guess no penalty was identified by TT.

[baldietax]

@california1977 if you're able to see your Form 2210 that helps you research what happened - check on Lines 1-9 what calculation was done and whether it used 90% of 2025 tax (line 4) or 100/110% of 2024 tax (line 😎 for the safe harbor calculation, and whether the inputs and calculation are correct.  Then you need to figure out why IRS arrived at a different result, I would start with your account and transcripts at irs.gov.  To @VolvoGirl 's point if your final payment was late that may generate a penalty that Turbotax wouldn't know about.  We don't have any context of how much penalty you are getting relative to tax due.

Once you've resolved why you have an unexpected penalty this may affect your 2026 planning also e.g. may want to increase withholding.

[baldietax]

line 😎 meaning line 8