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Level 1

Why am I being penalized to pay proper 2019 estimated tax when I paid it in full and on time?

 
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Level 15

Why am I being penalized to pay proper 2019 estimated tax when I paid it in full and on time?

The tax system is pay as you go. If you have a large lump sum of income during the year, you are required to make an estimated payment by the due date for the quarter in which the income was received. You can be charged and underpayment penalty for missing the estimated payment even if you pay in full when you file your return.

 

If TurboTax is suggesting that you owe a penalty, see if you can decline and not let the program add it to your tax return. Wait and see if the IRS bills you. If the IRS has already billed you for a penalty, you can apply for a waiver if this is the first time you have ever owed a penalty.


https://www.irs.gov/businesses/small-businesses-self-employed/penalty-relief-due-to-first-time-penal...

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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Level 15

Why am I being penalized to pay proper 2019 estimated tax when I paid it in full and on time?

The tax system is pay as you go. If you have a large lump sum of income during the year, you are required to make an estimated payment by the due date for the quarter in which the income was received. You can be charged and underpayment penalty for missing the estimated payment even if you pay in full when you file your return.

 

If TurboTax is suggesting that you owe a penalty, see if you can decline and not let the program add it to your tax return. Wait and see if the IRS bills you. If the IRS has already billed you for a penalty, you can apply for a waiver if this is the first time you have ever owed a penalty.


https://www.irs.gov/businesses/small-businesses-self-employed/penalty-relief-due-to-first-time-penal...

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

View solution in original post

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