Turbo Tax filed and paid my 2023 taxes. Now I have an underpayment penalty of $120. Is Turbo Tax responsible to pay my underpayment penalty under their guarantee?

[jdtizzle1]

How can I get TurboTax to assess my 2023 tax filing to determine whether my penalty is due to a mistake by Turbo Tax ?

[DoninGA]

Taxes are pay-as-you-go. This means that you need to pay most of your tax during the year, as you receive income, rather than paying at the end of the year. The Underpayment of Estimated Tax by Individuals Penalty applies to individuals, estates and trust that don't pay enough estimated tax on their income or you pay it late.

https://www.irs.gov/payments/underpayment-of-estimated-tax-by-individuals-penalty

[SharonD007]

TurboTax guarantees accurate calculations so if they 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.

[AuntyI]

I used the desktop computer version of TurboTax. I have variable income over the year, so sometimes my estimated tax payments haven't met with IRS requirements.  I have noticed that TurboTax calculates the penalty, but doesn't tell you about it; and  I seem to recall one year when I got some warning info after running the "error check" before filing, but this kind of processing seems to change every year.  Now I have learned the rules, and use form 2210 to calculate the estimated taxes based on my estimated income by quarter.  In any case, TurboTax should do the penalty calculations and at least warn you before submission.

[AuntyI]

It occurred to me that sometimes "you get what you pay for."  Maybe the online version does not automatically fill out form 2210 and so does not do the calculation.  Does your question mean that the IRS did not say what the penalty was for?  My reply was for the fairly straight-forward underpayment of quarterly taxes.  Was your case something more unusual?

[KeshaH]

TurboTax Online supports Form 2210. The penalty is automatically calculated when you owe at least $1,000 and haven't made your minimum required payment. You can choose to have the penalty included in your return or have the IRS calculate the payment and send you a bill.

If the underpayment penalty wasn't added to your return and the IRS assessed the penalty later, it's possible 1) you chose to have the IRS calculate the penalty or 2) the IRS adjusted your tax liability which then made you subject to the penalty.

However, if you paid your 2023 tax liability after April 15, 2024, it's possible that the penalty was a failure to pay penalty. The failure to pay penalty is assessed when the balance due on your tax return isn't paid by the due date.