Why am I being charged a penalty when I paid 94 percent of what is due?

[MindyB]

According to Why am I getting an underpayment penalty, "the IRS levies underpayment penalties if you don't withhold or pay enough tax on income received during each quarter. Even if you paid your tax bill in full by the April deadline or are getting a refund, you may still get an underpayment penalty." This means that the IRS looks at what is due each quarter, not just the tax due at the time of filing. 100% of tax is due for the current year (110% for higher earners), or 90% of last year's tax.

You can annualize your tax to possibly reduce the penalty. Here is how to enter the information in TurboTax Online:

1. Navigate to Federal > Other Tax Situations > Additional Tax Payments > Underpayment Penalties > Start or Revisit
2. Continue through the questions until you arrive at the screen Annualized Income Method, answer the questions in the interview.