TurboTax Incorrectly Calculating Underpayment Penalty for ROTH Conversion?

[bsholt]

I am having a problem with an underpayment penalty being added to my taxes for a ROTH conversion with estimated taxes being paid in the same quarter as the conversion. I am a W2 employee with taxes withheld and paid every 2 weeks. I don't think that I should be paying a penalty if I paid the taxes on the conversion in the same quarter.

I had to enter the annualized income for both federal and state (Alabama), which were not easy. Turbotax thinks that I should still pay a $10 underpayment for federal and a $25 underpayment penalty for Alabama.

This process should be easier and be able to better account for ROTH conversions.

[bsholt]

Is this an issue with the tax rules, or is it a limitation or weak point for TurboTax?