Why do i ihave an underpayment penalty for first time?

Forum|Forum|4 years ago
February 10, 2022
2 replies
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This year i'm being asked to file a form 2210 and have a penalty for underpayment.

I dont understand why i have a penalty, for the first time ever. What typical reasons are there for this, or am i doing something wrong in the questions?

Appreciate guidance.

ELERIC1980

Level 2

Me too. First time Im being asked to make this payment. I think Turbo Tax may need a few updates to get this rectified. Im a W2 and paid the correct amount of tax throughout the year, and am still being penalized the fee.

SteamTrain

Level 15

Yeah, the 2210 isn't scheduled to be ready until on/after 17 February....so the numbers that trigger the form could easily change. I have desktop, and looking at the Form 2210, I still see 2020 dates in one area, and in another 2021 dates , but still using the 2020 delayed months in another....so that preliminary form is totally messed up.

___________________________

Could you still be assessed a penalty, even with a refund?

Yes. 1099-R form income and Interest, Dividends, Mutual fund distributions (LT and ST gain), many of which usually show up in the last Quarter, are assumed to be received evenly over the year in the initial Default calculations that are used. That default calculation eliminates (75%?) of people from having to use a 2210, but for the rest of the folks, the 2210 may be needed.

I myself won't bother for less than a ~$50 penalty though, having done it once...too much wok.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*