Reversing TurboTax Estimated Tax Penalty

[jnltaylor]

Using TurboTax since well before 2010.  In both 2017 and 2018 filings TurboTax applied a estimated tax penalty to my 1040, of which I paid.  In both cases, several months later the IRS sent me a check for the exact amount of the TurboTax estimated tax penalty.  NOT doing it for 2019.  Something grossly wrong with TurboTax and applying its software to its slogan related pay the lowest tax, unless too much tax ahead of time results in a "Maximum Refund".  

In FORMS I can't find means to replace with $0.   Anyone know where I can override this line?

[Art5]

Best to just pay the penalty, hopefully it is not too much.  If Turbotax thinks you have a penalty, it has generally made sense in my previous returns.  When I got the strange refund from the IRS I figured it was like "Bank error in your favor" in Monopoly. 😊

[jnltaylor]

Art5, appreciate your fast response and unyielding optimism in TurboTax.  but that is the wrong answer.  If it is small penalty, then the IRS does not battle you for a penalty on top of a penalty which is the easiest audit reversal.  Over paying penalties and estimated taxes (another broken feature of TurboTax, but can be overridden by physical practice) is giving IRS an interest-free loan.  

These are our own personal taxes, the form should open the "cell" to $0 the input.  

[Stinkerbellkity]

Sounds like you are not going through the interview for underpayment penalty under the Other Topics tab.  Your answers there would likely have removed the penalty.

[jnltaylor]

Stinkerbellkity - thanks!  that was the answer - to hit "Start" at the estimated penalty tax line in other

[Stinkerbellkity]

Glad that worked for you.  Many people don't bother with this interview but it's the one needed to give the program additional information to make the best decision on whether you owe a penalty or not.

[sgs112]

I totally agree that Turbo Tax seems to be overstepping in figuring tax penalties associated with estimated taxes.  I not only overpaid my 2019 estimated income taxes, but I overpaid my actual 2018 taxes.  Turbo Tax is calculating over $1000 in penalties because the payments were not made in equally divided amounts.  There are a variety of reasons that people need to pay in varying amounts.  For instance, I am not guaranteed income and the amounts vary greatly when it is received.  In 2019,  when I received income, I increased each quarterly payment to account for the income.  TurboTax does not work with this situation well.  I have tried to calculate the penalties using each method Turbo tax offers.  Nothing helps.  The only way  to remove the penalty is to answer the questionnaire requesting a waiver and your statement for making the request is put at the back of the return.  I'd like to be able to delete the form entirely since I am due a huge refund.  A penalty on funds that I overpaid in advance is ridiculous.  TurboTax needs to fix this so I can send in the form if needed and eliminate it if not necessary,

[ConnieB2]

I want to override the Estimated Tax underpayment penalty but can't find the suggested "interview for underpayment penalty under the Other Topics tab". Appreciate some guidance.

[JohnB5677]

You have the option to "Let the IRS Bill me later".

On the menu at the top select

1. Other tax situations
2. Scroll to Additional Tax Payments
3. Select Underpayment Penalties
4. There is a lengthily interview, but you will come to Let the IRS Bill me later.

This will allow the IRS to bill for the underpayment.

The underpayment penalty may apply if :

• The amount of tax you paid during the tax year is less than 90% of the tax that you owed for the current year. 
  • Example:  in 2020 you had $8,500 withheld in taxes.  Your 2020 tax return shows that you owe $10,000.  That is less than 90% and there will be a penalty.
• The amount you paid during the tax year didn’t at least equal 100% of your taxes owed the prior year. 
  • Example:  Your 2019 tax return showed that you had $9,000 as a total tax obligation.  You paid $9,001 in withholdings in 2020.  Your 2020 tax bill comes in at $20,000.  There is no penalty because you paid 100% of the 2019 tax.
• The IRS also says you can probably avoid the penalty if the amount you owe is less than $1,000, after subtracting withholdings and refundable credit