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Question

How do I eliminate the underpayment penalty in TurboTax if 2024 was the very first year I have had income? The lesser of zero (2023 taxes) and 100% of 2024 taxes, is $0.

Forum|Forum|1 year ago
April 11, 2025
1 reply
0 views

I will be paying and filing taxes by the April 15th, 2025 deadline, so I am unsure why I am the penalty is being assessed. Again, this is my first time to file.

You could still owe an underpayment penalty, even if you had no income in the prior year.

Per the IRS, you may avoid the Underpayment of Estimated Tax by Individuals Penalty if:

Since you had no income last year, the second bullet point would not apply to your situation since it says, "whichever is less". However, the penalty will still be assessed if you owe more than $1,000 for 2024.

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