Turbo tax has determined that I owe the IRS $2,400 on my federal return for 2022. I did not not make any estimated payments during 2022 as I was not expecting to owe that much. Will I owe a penalty?If I owe a penalty will the IRS send me a bill or will Turbo Tax calculate the penalty and add it to the amount due?If Turbo tax calculates a penalty, at what point is it calculated (I haven''t seen anything yet)?

Question

Will I owe a penalty?

Forum|Forum|3 years ago
March 1, 2023
1 reply
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Turbo tax has determined that I owe the IRS $2,400 on my federal return for 2022. I did not not make any estimated payments during 2022 as I was not expecting to owe that much.

Will I owe a penalty?
If I owe a penalty will the IRS send me a bill or will Turbo Tax calculate the penalty and add it to the amount due?
If Turbo tax calculates a penalty, at what point is it calculated (I haven''t seen anything yet)?

C

Cynthiad66

Yes you will owe a penalty based on a balance due.

2. The IRS will eventually bill you and Turbo Tax will calculate up to the date of filing.

3. IRS will calculate your penalty up to the time of payment. It may take the IRS a few weeks to issue a bill for taxes due and penalty.

However, it sounds like this is your first time owing taxes at the end of the year and therefore might qualify for a penalty waiver.

If you have been assessed an underpayment penalty, then you can see if you may qualify for an exception to the penalty. You may want to look into these exceptions if this is the first year you owed tax and it is not a normal occurrence (i.e. you had one time income this year).

Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and estimated tax payments, or if they paid 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."

You can review the underpayment penalty section by using one of the following two methods

First, you can perform a search within the program.

Log in and click Take Me to My Return
Use the search icon in upper right-hand corner (magnifying glass icon)
Search for “underpayment penalty”
Click the “Jump to underpayment penalty” link
This will take you directly to the section of the program where you can review the underpayment penalty and possibly qualify for an exception

Second, you can use a step by step method of getting to the same place above

Log in and click Take Me to My Return
Click Federal Taxes (Personal if in Self-Employed)
Select Other Tax Situations
Scroll down to Additional Tax Payments
Click start/edit next to Underpayment Penalties

Click here for more information: Underpayment Penalty

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G

Gregwga50Author

actually, I owed $2000 last year and never got hit with a penalty, so I figure I've used up whatever grace I had with them. I'm upping my W4 withholding amount, so it won't happen again.