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phildonnia
Level 4

Why is there an estimated tax penalty if I my withholding for 2016 was more than my tax liability in 2015?

An estimated tax penalty appeared on my return, apparently because I owe quite a lot.  However, my withholding for 2016 was much more than my tax liability in 2015.  Where does the program ask for my 2015 tax liability so it knows that I withheld at least 100% of 2015 taxes?
1 Best answer

Accepted Solutions
ThomasM
New Member

Why is there an estimated tax penalty if I my withholding for 2016 was more than my tax liability in 2015?

You'll enter this information by clicking on the Federal Taxes tab, then select Other Tax Situations, then scroll down to Additional Tax Payments and click on Underpayment Penalties.  Then just follow the prompts.

TurboTax will ask you a variety of questions (some may apply, some not), and eventually you'll be prompted to enter your 2015 tax liability for 2210 purposes (Form 2210 is the underpayment penalty form) and 2015 AGI.

That may take care of the penalty.  But if you had 2015 AGI over $150,000, then the amount of 2016 withholding & estimated tax payments would have to exceed 110% of the tax shown on the 2015 return, rather than 100%.

View solution in original post

2 Replies
ThomasM
New Member

Why is there an estimated tax penalty if I my withholding for 2016 was more than my tax liability in 2015?

You'll enter this information by clicking on the Federal Taxes tab, then select Other Tax Situations, then scroll down to Additional Tax Payments and click on Underpayment Penalties.  Then just follow the prompts.

TurboTax will ask you a variety of questions (some may apply, some not), and eventually you'll be prompted to enter your 2015 tax liability for 2210 purposes (Form 2210 is the underpayment penalty form) and 2015 AGI.

That may take care of the penalty.  But if you had 2015 AGI over $150,000, then the amount of 2016 withholding & estimated tax payments would have to exceed 110% of the tax shown on the 2015 return, rather than 100%.

phildonnia
Level 4

Why is there an estimated tax penalty if I my withholding for 2016 was more than my tax liability in 2015?

Perfect, thanks!  No penalty now!

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