Turbotax keeps saying i owe an underpayment penalty. I don't. I refuse to pay Turbotax to correct its own error. Do I file with Turbotax or go another route?

Forum|Forum|2 years ago
April 2, 2024
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TurboTax Deluxe Online

Best answer by SteamTrain

Well...perhaps you do owe a penalty.

@lip2

A Penalty can occur even if you get a Refund.

This usually occurs if you make uneven quarterly estimated payments, or perhaps received a large distribution late in the year where you made just one end-of-year estimated payment.

________

Sometimes, if you are in this situation, you may be able to limit the penalty/interest by going thru the Underpayment penalty calculations on the "Other Tax Situations" page in the software, to prepare an Annualized Income tax form (2210/2210AI), that defines exactly when you received all your income, and exactly when you made payments/withholding etc thru the year....divided up by quarter.

It is a pain to do that though, (having done that once or twice) and I won't bother myself unless the penalty/interest is over ~$50.

SteamTrainAnswer

Employee

Well...perhaps you do owe a penalty.

@lip2

A Penalty can occur even if you get a Refund.

This usually occurs if you make uneven quarterly estimated payments, or perhaps received a large distribution late in the year where you made just one end-of-year estimated payment.

________

It is a pain to do that though, (having done that once or twice) and I won't bother myself unless the penalty/interest is over ~$50.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

lip2Author

well, i enter the same information in plausible but slightly different ways and the penalty changes by $1 to a few hundred dollars, so, no, in fact. I don't.

Mike9241

we can tell whether you owe a penalty or not. if you don't trust Turbotax's calculation you can check box C on form 2210 to let the IRS compute the penalty, if any.