Underpayment penalty - amended return

Forum|Forum|6 years ago
March 20, 2020
2 replies
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I 've already e-filed my 2019 taxes which subtracted an underpayment penalty from my refund. I later realized that if I annualized my income I could eliminate this penalty. I went into TurboTax to amend my return to get my penalty back. I entered all the required annualized info and it agreed with me that I don't owe a penalty. However when I look at form 1040X it doesn't show me getting back the penalty, it appears as if nothing changed. It shows my original refund without the penalty and the amended refund (also without the penalty) so there is no difference between the amended refund and the original refund. How do I get TT to create an amended return where it takes into account the penalty on the original return?

Best answer by JulieS

If you go back through the amendment process, it asks you to verify your original refund. You can change the amount of your refund on that page to show the refund that included the penalty.

This will show that you get a refund of the amount of the penalty. Line 18 is the amount as shown on your originally filed return.

I would also make clear in your amendment explanation that you are amending to eliminate the penalty. Be sure to attach your Form 2210 to your Form 1040X.

linaj20201

Generally, if changing the information does not create a difference in your total refund or tax due, you do not need to amend. Without seeing your tax forms and program, I won't be able to tell.

I would suggest you consider using TurboTaxLive to file your 2019 taxes. This way you could have one of our tax professionals to review your tax forms.

To reach one of our tax professionals, in the TurboTax program, once you complete your taxes, before you file, you’ll be given the option for a final review of your return by one of our experts. After they completed reviewing your return, they’ll inform you of any proposed changes.

Here are the instructions:

https://ttlc.intuit.com/community/choosing-a-product/help/what-is-turbotax-live/00/27191

102jmhAuthor

The only thing that I'm changing is that the original return used the short method for estimated payments due and averaged my tax liability evenly over each payment period. In doing so it calculated that I owed a underestimated tax penalty. Since my income varied greatly in Q4, I filled out form 2210 with the annualized method and no penalty is owed. TurboTax doesn't show the penalty on column A of form 1040X so it's not making an adjustment in column B so that I can get the penalty refunded. I looking for help on what I need to do to get TurboTax to take into account the penalty on the original return.

JulieSAnswer

If you go back through the amendment process, it asks you to verify your original refund. You can change the amount of your refund on that page to show the refund that included the penalty.

This will show that you get a refund of the amount of the penalty. Line 18 is the amount as shown on your originally filed return.

I would also make clear in your amendment explanation that you are amending to eliminate the penalty. Be sure to attach your Form 2210 to your Form 1040X.

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cparke3

Employee

Can you confirm if this actually worked when they processed your amended return?

Amended returns are manually reviewed and processed. Penalties, including underpayment penalty, are not explicitly waived or removed through an amended return. I think IRS has a different process for dealing with penalties called, "abatement"

What the advice here has basically told you to do is treat the penalty you paid as an additional tax deducted from your refund. I'm not sure that's going to pass muster with IRS, however.