The message says I have a penalty. How can I continue filling taxes?

[eokruashvili2002]

Should I annualized income or no I don’t understand.

[VolvoGirl]

Do you have an underpayment penalty on 1040 line 38?  Or a penalty for something else?

You might be able to eliminate it or at least reduce it.  You can go to Federal Taxes tab or Personal tab, under Other Tax Situations and select Start by the Underpayment Penalties. You will answer a series of questions that may reduce or eliminate the penalty. Or you can elect to have the IRS figure the penalty for you.  It's form 2210.

It's under

Federal or Personal (for Home & Business Desktop)

Other Tax Situations

Additional Tax Payments

Underpayment Penalties - Click the Start or update button

[MindyB]

If you have a penalty, it doesn't hurt to try to annualize to see if it can be reduced.  This will be helpful if you made more income towards the end of the year. 

Here is how to enter the information in TurboTax Online:

1. Navigate to Federal > Other Tax Situations > Additional Tax Payments > Underpayment Penalties > Start or Revisit
2. Continue through the questions until you arrive at the screen Annualized Income Method, answer Yes, and Continue on the next 2 screens
3.  Enter the what you earned in the first 3 quarters on the screen Annualized Adjusted Gross Income, ensuring the amounts are cumulative for the year. 
4. Similar to step 3, on the screen Itemized Deductions on Schedule A enter the what your deductions were in the first 3 quarters, ensuring the amounts are cumulative for the year. 
5. Continue with the process for the following screens until you reach the Conclusion, which needs to be unchecked if you want to see the results.
6. Continue through the interview, answering the questions, until you reach Underpayment Penalty, which tells you what the underpayment computed using the annualized method is.

See also: Why am I getting an underpayment penalty if I'm getting a refund?