Underpayment Penalty

Forum|Forum|6 years ago
October 8, 2019
2 replies
1 view

If all my sums are only lump-sum for the year, will TurboTax miscalculate my underpeyamnt penalty? If yes, what should I do to get the correct underpayment penalty?

Best answer by VolvoGirl

You can go to Federal Taxes tab or Personal tab, under Other Tax Situations and select Start by the Underpayment Penalties. You will answer a series of questions that may reduce or eliminate the penalty. Or you can elect to have the IRS figure the penalty for you. It's form 2210.

It's under

Federal or Personal (for Home & Business Desktop)

Other Tax Situations

Additional Tax Payments

Underpayment Penalties - Click the Start or update button

And even if you or Turbo Tax adds it on line 23 it is only an estimate. It's common and expected for the IRS to bill you for more depending on when they actually get your payment. Or even send you a refund for some.

VolvoGirlAnswer

Level 15

It's under

Federal or Personal (for Home & Business Desktop)

Other Tax Situations

Additional Tax Payments

Underpayment Penalties - Click the Start or update button

mpsingh08Author

Level 4

Thanks!

Anonymous

what do you mean by my sums are only lump-sum for the year

there are two ways to calculate the underpayment penalty. the first assumes your income is earned equally throughout the year and so is your withholding unless you enter you actual withholding (in PART II of 2210 check box D) and enter actual withholding below. any estimated tax payments use the date you entered for payment. if blank then the due date is assumed.

there is also the option to figure your tax penalty using the annualized income installment method where you have to use your actual income and expenses for the periods listed at the top except the entire year column which is automatically populated. in part II of 2210 check box c and use the quickzoom.