underpayment of estimated taxes

[axpfarrell]

We paid 105% of our total 2022 federal taxes in estimated taxes for 2023. (82% of the 2023 total)  TT calculated an underpayment of estimated taxes. Is this a mistake?

[ThomasM125]

Even though you paid in more in estimated tax than your tax was for the previous year, there are still two scenarios that may result in you getting a tax penalty. One possibility is that you didn't pay the tax in on a timely basis. The tax would have had to be paid in in equal amounts by the due date of each quarterly payment. You may be able to get around this requirement by reporting your estimated tax using the annualized income installment method, however. You will see an option for that in the Other Tax Situations screen in TurboTax, and then Other Tax Forms and then Form W-4 and Estimated Taxes.

The other potential problem would be that your income was over $150,000. In that scenario, you are required to pay 110% of your tax from the previous year. You can learn more here: Estimated tax