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Solved

Underpayment penalty

Forum|Forum|2 years ago
March 29, 2024
1 reply
13 views

I met all the IRS rules applied to above, ie paying 100% of prior year's tax or 90% of current tax owed, and owe less $1,000 tax this year. Why is TurboTax still calculating underpayment penalty on my tax return by completing form 2210?? Thank you...LL

Best answer by Mike9241

This most likely occurs because you made uneven estimated tax payments.

1/4 of any withholding is assumed to have been paid for each period ending 3/31, 5/31, 8/31, and 12/31

estimates are only credited for the period paid. the default is that 1/4 of your income tax is due each period (estimates by the 15 of the month following). Thus uneven estimates can result in penalties because of the default method.

You can use the annualized income installment method on page 3 of the 2210 to see if that will lower your penalties.

Answer

Level 15

This most likely occurs because you made uneven estimated tax payments.

1/4 of any withholding is assumed to have been paid for each period ending 3/31, 5/31, 8/31, and 12/31

estimates are only credited for the period paid. the default is that 1/4 of your income tax is due each period (estimates by the 15 of the month following). Thus uneven estimates can result in penalties because of the default method.

You can use the annualized income installment method on page 3 of the 2210 to see if that will lower your penalties.

Mike9241