Taxes (Schedule C and Personal) and was late on Estimated for January 2025 due to IRS not deducting amount

[Robertsonland]

My wife has a photography business and we pay estimated quarterly taxes ($1,200 each quarter). Her income does fluctuate from year to year and quarter to quarter to be honest as the first quarter she does many shoots. Q2 is pretty quiet, Q3 picks up a bit and Q4 is like Q1. 

Instead of sending in a check she did the online version to deduct the $1,200 from the account on January 13th. It didn't come out and I got an email about a "returned payment" on January 17th. I called in and talked to someone who told me they were behind on processing payments and to give it more time. They said to wait until the end of January or more likely until mid to late February. I waited until into February and still nothing. 

So I called again and this person told me it was deducted but then redeposited right away. She said to go ahead and redo the payment. Online wouldn't accept a 2024 Estimated so I mailed it in that day. 

So we were late in paying and I'm worried about a penalty. The pending Online still shows there as pending for January 13th. 

Also in 2023 our tax owed was $10.6K less than it was this year in 2024 so we paid $10.6K more in 2024 than we did in 2023. We owe just a little over $1K this year (due to SE taxes) so will I get a penalty since I paid more than 110% of last years taxes? If so can I fight this since it was set up to withdraw but for some reason didn't? 

[KrisD15 · Accepted solution]

No, you will not get a Underpayment penalty.

If you paid more than 100% of your 2023 tax liability, the IRS will not apply a penalty.

According to the IRS:

You may avoid the Underpayment of Estimated Tax by Individuals Penalty if:

Your filed tax return shows you owe less than $1,000 or
You paid at least 90% of the tax shown on the return for the taxable year or 100% of the tax shown on the return for the prior year, whichever amount is less. If your adjusted gross income (AGI) for 2023 was more than $150,000 ($75,000 if your filing status for 2024 is married filing separately), substitute 110% for 100%.
 

[Robertsonland]

Thank you for confirming. That's what I read but wanted to make sure before I filed.

[KrisD15]

Thank you for using TurboTax.