Hello Tax Experts,
I just attempted to complete my 2024 taxes and I notice that TurboTax has included "UnderPayment Penalty" for the following two sources of income:
- Sale of Stocks
- Grants of RSUs : Employer does not seem to have calculated and deducted the taxes as needed.
The above two factors have caused "taxes due" for me and accordingly Turbo Tax is adding Underpayment Penalty.
Question is - is there a way to avoid this as this was beyond my control. I couldn't have asked my employer proactively to deduct more taxes and similarly I don't think there is a way for me to asking my brokerage to withhold taxes.
I would really appreciate your help and pointers to save me some money 🙂
Regards
Chandra.
If you get a penalty on 1040 line 38, 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.
How to add form 2210 for Underpayment Penalty
https://ttlc.intuit.com/community/tax-payments/help/how-do-i-add-form-2210/00/25703
It's under
Federal or Personal (for Home & Business Desktop)
Other Tax Situations
Additional Tax Payments
Underpayment Penalties - Click the Start or update button
If you get a penalty on 1040 line 38, 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.
How to add form 2210 for Underpayment Penalty
https://ttlc.intuit.com/community/tax-payments/help/how-do-i-add-form-2210/00/25703
It's under
Federal or Personal (for Home & Business Desktop)
Other Tax Situations
Additional Tax Payments
Underpayment Penalties - Click the Start or update button