Underpayment penalty not on 1040

[dlbart]

After using TurboTax for years, I trusted the service.  Shame on me.  While going through TurboTax, I got a prompt of an underpayment penalty of $515. This did not appear on my 1040 and I did not notice. I just received an IRS letter for underpayment penalty of $441. Why did TurboTax miss this on my return? I paid for the MAX support but not sure where to turn.

[baldietax]

What happened when you got the prompt about the $515, did you go through the Other Tax Situations / Underpayment Penalty section and opt for the IRS to bill you later (see example below)

Either way, the outcome is IRS calculated it for you which is a valid option, it doesn't need to be on your 1040 and you will not be penalized as long as pay the IRS by the date in the letter.

From 1040 instructions:
https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

Because Form 2210 is complicated, you can leave line 38 blank and the IRS will figure the penalty and send you a bill. We won’t charge you interest on the penalty if you pay by the date specified on the bill.

[dlbart]

Hello, That's the strange part. I didn't opt out of the underpayment being included in our taxes. I tried to amend to see where this may have been part of TurboTax but can't find that spot in the process.

[MonikaK1]

If you received a letter from the IRS with a penalty calculated, you can go back through the Underpayment Penalty section in TurboTax and see if changing to the annualized method or actual withholding date method would reduce the penalty.

TurboTax does calculate underpayment penalties. However, Form 2210, Underpayment of Estimated Tax, is only required to be filled out by the taxpayer in certain situations:

• A You request a waiver (see instructions) of your entire penalty. You must check this box and file page 1 of Form 2210, but you aren’t required to figure your penalty. 
• B You request a waiver (see instructions) of part of your penalty. You must figure your penalty and waiver amount and file Form 2210. 
• C Your income varied during the year and your penalty is reduced or eliminated when figured using the annualized income installment method. You must figure the penalty using Schedule Al and file Form 2210. 
• D Your penalty is lower when figured by treating the federal income tax withheld from your income as paid on the dates it was actually withheld, instead of in equal amounts on the payment due dates. You must figure your penalty and file Form 2210. 
• E You filed or are filing a joint return for either 2024 or 2025, but not for both years, and line 8 above is smaller than line 5 above. You must file page 1 of Form 2210, but you aren’t required to figure your penalty (unless box B, C, or D applies).

To review underpayment penalties, in TurboTax Online:

1. Open return and choose Other Tax Situations
2. Choose Underpayment Penalties
3. If asked "do you want to review estimated taxes" choose Yes
4. If a penalty was calculated, you should see the option to annualize to possibly reduce penalty

See this TurboTax tips article for more information about Form 2210.

@dlbart