Turbo Tax just told me I have a penalty for underpayment of estimated taxes, but I don't (or have ever) paid estimated taxes. How can I fix this?

[Ashby · Accepted solution]

If you owe over $1,000 in tax liability and did not pay at least 90% of your taxes during the year through withholdings, then you will receive and underpayment penalty. The IRS is a pay-as-you-go tax collector. This means that you are supposed to pay in taxes as you earn and not at the end of the year.

You should probably have more withheld from your check or make quarterly estimated payments. Fortunately, the underpayment penalty is not very severe. But, nobody wants to pay any kind of penalty.