Why am I getting a penalty fee when I actually over paid 2022?

[kammascott]

I accidentally paid my taxes twice last year and was refunded. One of the payments, however was an underpayment. I even earned interest on the overpayment.

[Vanessa A]

Where do you see you are getting a penalty for 2022?  If it is an underpayment penalty that means you did not pay enough in during 2022.

If you accidentally overpaid for 2021, this will not really affect your 2022 taxes since it was refunded to you.  Every tax year is separate from the previous tax year.  So you don't really get a benefit from having a refund from the previous tax year.

Your tax liability for 2021 would be found on line 18 of your 2021 return.  If you have taxes due this year and paid at least 110% of your tax liability found on line 18 for 2021 or 90% of your tax liability for 2022 then you can walk through the steps to have your penalty eliminated.  

You can do this by taking the following steps 

• Other Tax Situations
• Show more next to Additional Tax Payments
• Start next to Underpayment penalties

[Opus 17]

Using the standard formula, your income is treated as being earned equally over the year.  If you had a late lump sum and made a late payment, you can be considered underpaid for the earlier quarters.

The IRS calculates their own penalty and the Turbotax formula is rarely exactly right, if you pay a penalty now you still could get a few dollar refund or a few dollar extra bill.  I would decline to allow Turbotax to calculate any penalty.  Wait and see if the IRS bills you.  If they do, you can request a waiver for cause or if it was your first time owing a penalty.  You can't request a waiver if you pay the penalty on speculation. 

[Mike9241]

there are many different penalties. see form 2210 for underpayment penalty calculation. entering a bad date or paying late will cause this. some other penalties are computed on form 5329.  it would help if we knew the form and line number.