Why do I have a estimated tax penalty in my 2020 tax return? Married filing jointly, my wife had self employment income in 2019, but not in 2020. 2020 she was on W2.

It depends. The penalty generally applies when you owe more than $1,000 in federal tax on your tax return. Per the IRS, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and estimated tax payments, or if they paid at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller.

 To review your underpayment, please follow the instructions below:

1. Open your return.
2. Search for underpayment penalty with the magnifying glass tool at the top of the page.
3. Select the Jump to link at the top of the search results.
4. Review your underpayment and see if you qualify for an exception.