Do you have a tax due? If you do not pay enough tax, you may have to pay a penalty for underpayment of estimated tax. Even if you are getting a refund you can still owe a penalty for not paying in evenly during the year. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, 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. It is included in your tax due or reduces your refund.
You might be able to eliminate it or at least reduce it. You can go to Federal Taxes tab or Personal tab, under Other Tax Situations and select Start by the Underpayment Penalties. You will answer a series of questions that may reduce or eliminate the penalty. Or you can elect to have the IRS figure the penalty for you. It's form 2210.
Federal or Personal (for Home & Business Desktop)
Other Tax Situations
Additional Tax Payments
Underpayment Penalties - Click the Start or update button
The estimated taxes will be reported on form 1040 line 26. Line 23 is for Other Taxes which include self employment tax, Social security and Medicare taxes.
To report the estimated taxes on your tax return:
- Log in to your account.
- Select Federal Taxes from the left menu.
- Go to Deductions and Credits .
- Scroll down to Estimates and Other Taxes Paid and click Start next to Estimated Tax Payments
**Mark the post that answers your question by clicking on "Mark as Best Answer"
did you pay enough in estimates.
there should be no underpayment penalty if any of these apply:
1) 2020 taxes less withholding are under $1000
2) 2020 withholding and timely estimated tax payments are 90% of 2020 tax
3) 2020 withholding and timely estimated tax payments are 100% of 2019 tax (or 110% if your 2019 adjusted gross income was over $150,000, $75,000 if married filing separate)