Expert Reviewed You will have a penalty if you don't fulfill at least one of these IRS requirements. You paid 90% of the tax that you owe for the current year. If the current taxes paid are equal to 100%, (110% for higher incomes) of your taxes owed the previous year. The IRS also says you can probably avoid the penalty if the amount you owe is less than $1,000.To avoid this, you should change your W-4 to take extra taxes from your paycheck, or pay estimated taxes. For more information, see, Avoid a tax penalty

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jfsgreen

Level 1

Solved

Why do I have a penalty?

Forum|Forum|6 months ago
February 25, 2026
2 replies
64 views

No text available

TurboTax Online

Best answer by JohnB5677

Expert Reviewed

You will have a penalty if you don't fulfill at least one of these IRS requirements.

You paid 90% of the tax that you owe for the current year. 
If the current taxes paid are equal to 100%, (110% for higher incomes) of your taxes owed the previous year. 
The IRS also says you can probably avoid the penalty if the amount you owe is less than $1,000.

To avoid this, you should change your W-4 to take extra taxes from your paycheck, or pay estimated taxes.

For more information, see, Avoid a tax penalty

DoninGA

Level 15

Go to this IRS website for information on the Underpayment of Taxes penalty - https://www.irs.gov/payments/underpayment-of-estimated-tax-by-individuals-penalty

JohnB5677Answer

Level 15

Expert Reviewed

You will have a penalty if you don't fulfill at least one of these IRS requirements.

You paid 90% of the tax that you owe for the current year. 
If the current taxes paid are equal to 100%, (110% for higher incomes) of your taxes owed the previous year. 
The IRS also says you can probably avoid the penalty if the amount you owe is less than $1,000.

To avoid this, you should change your W-4 to take extra taxes from your paycheck, or pay estimated taxes.

For more information, see, Avoid a tax penalty

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