Why suddenly an underpayment penalty?

[warph21]

We've paid our withholding on all our income throughout the year, so why would it need to be estimated?

[ReginaM]

I am sorry we don't have access to your account to determine why you were charged an underpayment penalty.   If you didn't pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax.

Most people will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and refundable credits, or if they paid withholding and estimated tax of 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.

The estimated tax vouchers are printed out based on information you entered and serve as a reminder for you. They are not sent to the IRS. You can choose to pay or not to pay these quarterly payments. Here is some helpful information on Estimated Tax Payments