Question

Hi, I paid everything TurboTax said I owed, yet IRS saying I still owe $433.50 for "Failure to pay proper estimated tax penalty." What happened?

Forum|Forum|6 years ago
June 8, 2019
2 replies
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I paid everything I was told to pay after completing my taxes with TurboTax. I just got a letter saying I owe $433.50 for "Failure to pay proper estimated tax penalty." Can someone please explain what I did wrong or what TurboTax did wrong?

TurboTax Self Employed Online

fanfare

Employee

Since TurboTax calculates the bulk of your penalty, that's a pretty large added penalty. You must have a large income.

Rainman12

Employee

Nobody did anything wrong. IRS can't assign accurate interest/penalties until they've accepted your initially due amount. Way to avoid: Pay 110% of last year's taxes in estimated payments/withholding earlier in the year.

T

trob1111Author

Thank you. I understand there are taxes and penalties when you don't "pay as you go." I just thought TurboTax had already added this in during the Q&A process that gathered the data for completing my return. And I am not sure I understand why the IRS would need to wait to assign accurate interest/penalties until after accepting my return. Aren't these fixed percentages? My main point is that TurboTax never indicated that this extra bill was still looming. I wished they had simply informed me my tax payment was not complete. I was not delaying paying my estimated tax because I was lazy, I had been laid off and had was barely making ends meet with a new job.