Turbo Tax again this year failed to calculate correctly whether I owed a penalty for underpayment.I received a letter today from the State of NM saying we owed a penalty. Please identify the problem and fix this issue in the software.
The Federal program, and each state program, contain a topic in the interview asking if you want to calculate the penalty for underpayment of estimated tax. You can agree to do that or to allow the state to calculate it for you. You have to choose to calculate it yourself and then complete the interview to get estimated penalties. Even doing all that does not guarantee the penalty will be exact because the state calculates the penalty up until the time they receive and process your payment, and that may be some time after you file your return.