H&R Block Tax Software and Underpayment Penalty

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grettman
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H&R Block Tax Software and Underpayment Penalty

Post by grettman » Sat Mar 30, 2019 6:17 am

Hi,

I was one of those people who didn't make adjustments to my withholdings so I owe money to the IRS this year. Based on what I know from reading the IRS website, normally one must pay 90% of their tax liability throughout the year or they will face a penalty (unless of course they meet the waiver requirements). For this year, the IRS is lowering that threshold to 85% because the new tax law impacted so many people.

I am using H&R Block tax software and it reads that I might have to pay the penalty unless I get waiver and I am very confused. My tax liability is $19, 295 and $16,459 was withheld during the year. That puts me at 85.298%.

(1) What should I do? I wouldn't imagine that I have to file a waiver because I am above the threshold! Thoughts?
(2) H&R block is updated and and the software says that no other updates are planned. It seems as though H&R block isn't aware of the new 85% threshold...but that seems very surprising to me. What do you think?

I really don't know what to do here but the software is only giving me a choice to calculate the penalty myself or to have the IRS do it. I want NEITHER because I am above the threshold. Please help.

core4portfolio
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Re: H&R Block Tax Software and Underpayment Penalty

Post by core4portfolio » Sat Mar 30, 2019 6:37 am

Without asking any detail, i would say try using Turbotax or taxact and see what its saying.
Its just comparison
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rkhusky
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Re: H&R Block Tax Software and Underpayment Penalty

Post by rkhusky » Sat Mar 30, 2019 6:40 am

Calculate the penalty yourself and put zero?

retiredjg
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Re: H&R Block Tax Software and Underpayment Penalty

Post by retiredjg » Sat Mar 30, 2019 6:58 am

Turbotax generated the waiver form for me and then it wrote "85% waiver" on a line on that form. I don't know if it actually sent the form to the IRS or not, but it had to be filled in in order for me to file electronically.

I'd let the IRS calculate the penalty. They will know what to do.

And the waiver was lowered once again - it is now 80%.

Lindyhopper
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Re: H&R Block Tax Software and Underpayment Penalty

Post by Lindyhopper » Sat Mar 30, 2019 7:01 am

I think they lowered the threshold to 80% this week, so Block would have to do an update.

Does Block have a "Contact us" chat or email?
Could anything else be triggering it?

cas
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Re: H&R Block Tax Software and Underpayment Penalty

Post by cas » Sat Mar 30, 2019 7:06 am

grettman wrote:
Sat Mar 30, 2019 6:17 am
For this year, the IRS is lowering that threshold to 85% because the new tax law impacted so many people.\
Actually, a week ago Friday the IRS lowered the threshold to 80% (from 85%). But let's ignore that, since the difference between 85% and 80% doesn't seem to make any difference to your situation. ( https://www.irs.gov/newsroom/irs-expand ... 80-percent)
I am using H&R Block tax software and it reads that I might have to pay the penalty unless I get waiver and I am very confused. My tax liability is $19, 295 and $16,459 was withheld during the year. That puts me at 85.298%.

(1) What should I do? I wouldn't imagine that I have to file a waiver because I am above the threshold! Thoughts?
So, if I understand correctly...

- Your withholding did *not* meet the normal 90% threshold.
- Your withholding *did* meet the this-year-only 85% threshold.

The instructions for 2010 IRS form 2210 (the form that deals with the entire matter of safe harbors, waivers, and calculation of underpayment penalty) say that if you want to take advantage of the 85% threshold waiver you *must* file at least the first page of Form 2210. I think that is probably what HRB is getting at when it says you "need to get the waiver".

From the 2018 IRS Form 2210 Instructions. Bold added by me. (https://www.irs.gov/instructions/i2210# ... 4574596928)
Tax reform waiver.

If you are an individual taxpayer and you otherwise owe an estimated tax penalty, the IRS will waive the penalty under certain conditions. You otherwise owe a penalty if line 9 is more than line 6 after completing Part I of Form 2210. If line 9 of Part I is more than line 6, complete the 85% Exception Worksheet below to see if you meet the conditions to be eligible to claim the waiver. If so, you must check Box A in Part II, write "85% Waiver" next to Box A, and file page 1 of Form 2210 with your return to request the waiver.

(2) H&R block is updated and and the software says that no other updates are planned. It seems as though H&R block isn't aware of the new 85% threshold...but that seems very surprising to me. What do you think?

I really don't know what to do here but the software is only giving me a choice to calculate the penalty myself or to have the IRS do it. I want NEITHER because I am above the threshold. Please help.
I use Turbotax rather than HRB, so someone else will need to help with the specifics. But, when Turbotax asks that question about whether you want to "calculate the penalty yourself or have the IRS do it", "Do you want to calcuculate the penalty yourself" really means

"Do you want Turbotax to fill out Form 2210 and include it with your return?"

I suspect that is what HRB is getting at. I suspect that if you tell it you want to "calculate the penalty yourself" it will promptly produce the filled out Form 2210, with the Part II Box A checked and notated with "85% waiver" as described in the IRS instructions. And including that filled out Form 2210 in your return qualifies as "getting the waiver."

Topic Author
grettman
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Re: H&R Block Tax Software and Underpayment Penalty

Post by grettman » Sat Mar 30, 2019 7:28 am

cas wrote:
Sat Mar 30, 2019 7:06 am
grettman wrote:
Sat Mar 30, 2019 6:17 am
For this year, the IRS is lowering that threshold to 85% because the new tax law impacted so many people.\
Actually, a week ago Friday the IRS lowered the threshold to 80% (from 85%). But let's ignore that, since the difference between 85% and 80% doesn't seem to make any difference to your situation. ( https://www.irs.gov/newsroom/irs-expand ... 80-percent)
I am using H&R Block tax software and it reads that I might have to pay the penalty unless I get waiver and I am very confused. My tax liability is $19, 295 and $16,459 was withheld during the year. That puts me at 85.298%.

(1) What should I do? I wouldn't imagine that I have to file a waiver because I am above the threshold! Thoughts?
So, if I understand correctly...

- Your withholding did *not* meet the normal 90% threshold.
- Your withholding *did* meet the this-year-only 85% threshold.

The instructions for 2010 IRS form 2210 (the form that deals with the entire matter of safe harbors, waivers, and calculation of underpayment penalty) say that if you want to take advantage of the 85% threshold waiver you *must* file at least the first page of Form 2210. I think that is probably what HRB is getting at when it says you "need to get the waiver".

From the 2018 IRS Form 2210 Instructions. Bold added by me. (https://www.irs.gov/instructions/i2210# ... 4574596928)
Tax reform waiver.

If you are an individual taxpayer and you otherwise owe an estimated tax penalty, the IRS will waive the penalty under certain conditions. You otherwise owe a penalty if line 9 is more than line 6 after completing Part I of Form 2210. If line 9 of Part I is more than line 6, complete the 85% Exception Worksheet below to see if you meet the conditions to be eligible to claim the waiver. If so, you must check Box A in Part II, write "85% Waiver" next to Box A, and file page 1 of Form 2210 with your return to request the waiver.

(2) H&R block is updated and and the software says that no other updates are planned. It seems as though H&R block isn't aware of the new 85% threshold...but that seems very surprising to me. What do you think?

I really don't know what to do here but the software is only giving me a choice to calculate the penalty myself or to have the IRS do it. I want NEITHER because I am above the threshold. Please help.
I use Turbotax rather than HRB, so someone else will need to help with the specifics. But, when Turbotax asks that question about whether you want to "calculate the penalty yourself or have the IRS do it", "Do you want to calcuculate the penalty yourself" really means

"Do you want Turbotax to fill out Form 2210 and include it with your return?"

I suspect that is what HRB is getting at. I suspect that if you tell it you want to "calculate the penalty yourself" it will promptly produce the filled out Form 2210, with the Part II Box A checked and notated with "85% waiver" as described in the IRS instructions. And including that filled out Form 2210 in your return qualifies as "getting the waiver."

Thanks everyone for the replies. Unfortunately the HRB software doesn't have a clue about the 85% (now 80% waiver) so this situation is a PIA. Seems from the comments above I need to fill the 2210 but if I have HRB do it, it will be screwed up because it doesn't know about the new tax rules.... I should have stayed with TurboTax!

livesoft
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Re: H&R Block Tax Software and Underpayment Penalty

Post by livesoft » Sat Mar 30, 2019 7:30 am

I'd do a google search "Does HRBlock tax prep software have a clue about the 80% waiver penalty?"

And contact HRB for help. You paid them for the help.
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jebmke
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Re: H&R Block Tax Software and Underpayment Penalty

Post by jebmke » Sat Mar 30, 2019 7:34 am

grettman wrote:
Sat Mar 30, 2019 7:28 am
Thanks everyone for the replies. Unfortunately the HRB software doesn't have a clue about the 85% (now 80% waiver) so this situation is a PIA. Seems from the comments above I need to fill the 2210 but if I have HRB do it, it will be screwed up because it doesn't know about the new tax rules.... I should have stayed with TurboTax!
I just opened up my draft return using HRB 2018 Deluxe. When I go to Forms and open up the 2210 it shows a mini-worksheet that calculates the "80% exception waiver."
When you discover that you are riding a dead horse, the best strategy is to dismount.

livesoft
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Re: H&R Block Tax Software and Underpayment Penalty

Post by livesoft » Sat Mar 30, 2019 7:36 am

jebmke wrote:
Sat Mar 30, 2019 7:34 am
I just opened up my draft return using HRB 2018 Deluxe. When I go to Forms and open up the 2210 it shows a mini-worksheet that calculates the "80% exception waiver."
Maybe the OP can click on "Calculate it yourself" and the calculation will come to $0.00.
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retiredjg
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Re: H&R Block Tax Software and Underpayment Penalty

Post by retiredjg » Sat Mar 30, 2019 7:42 am

grettman wrote:
Sat Mar 30, 2019 7:28 am
Unfortunately the HRB software doesn't have a clue about the 85% (now 80% waiver) so this situation is a PIA. Seems from the comments above I need to fill the 2210 but if I have HRB do it, it will be screwed up because it doesn't know about the new tax rules.... I should have stayed with TurboTax!
That seems very unlikely this late in the tax year. The software knows what to do. You just have to figure out how to enter the information.

TT had it's problems with this step as well. It would fill out form but not allow the return to be filed for several days due to a glitch. I was one of them - but since I only had to wait 1 day, it was no big deal. Some people experienced longer delays and got pretty upset about it.

Lots of changes this tax year. Lots of frustrations. :(

Topic Author
grettman
Posts: 466
Joined: Mon Sep 29, 2014 1:47 pm

Re: H&R Block Tax Software and Underpayment Penalty

Post by grettman » Sat Mar 30, 2019 9:04 am

jebmke wrote:
Sat Mar 30, 2019 7:34 am
grettman wrote:
Sat Mar 30, 2019 7:28 am
Thanks everyone for the replies. Unfortunately the HRB software doesn't have a clue about the 85% (now 80% waiver) so this situation is a PIA. Seems from the comments above I need to fill the 2210 but if I have HRB do it, it will be screwed up because it doesn't know about the new tax rules.... I should have stayed with TurboTax!
I just opened up my draft return using HRB 2018 Deluxe. When I go to Forms and open up the 2210 it shows a mini-worksheet that calculates the "80% exception waiver."
I running the same software (Mac version). When I open the forms, I am seeing a 2210 that is based on 90%. Ugh.

Topic Author
grettman
Posts: 466
Joined: Mon Sep 29, 2014 1:47 pm

Re: H&R Block Tax Software and Underpayment Penalty

Post by grettman » Sat Mar 30, 2019 9:09 am

All:

I really appreciate the help and knowing that the threshold was reduced to 80% is something I wouldn't have learned if it wasn't for the group.

I don't need any more assistance. I will figure out a way to trick the software/get around this some how. I am happy to know that I am not going to get hit with a penalty. Now I just need to figure out HRB and how to handle the situation.

No more assistance necessary. Thanks all.

retiredjg
Posts: 38477
Joined: Thu Jan 10, 2008 12:56 pm

Re: H&R Block Tax Software and Underpayment Penalty

Post by retiredjg » Sat Mar 30, 2019 9:36 am

grettman wrote:
Sat Mar 30, 2019 9:04 am
I running the same software (Mac version). When I open the forms, I am seeing a 2210 that is based on 90%. Ugh.
Maybe the form IS based on the 90% number. That is why 80% is a waiver. It is a waiver from the required 90%.

joylesshusband
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Re: H&R Block Tax Software and Underpayment Penalty

Post by joylesshusband » Sat Mar 30, 2019 9:48 am

grettman wrote:
Sat Mar 30, 2019 6:17 am
I really don't know what to do here but the software is only giving me a choice to calculate the penalty myself or to have the IRS do it. I want NEITHER because I am above the threshold. Please help.
A total non-issue.

I have and used the HR Block for 2018 taxes. You need to merely select the "calculate the penalty myself" option, and then keep answering the interview from there. The software will apply the 80% threshold automatically, will check the box for the 80% waiver, and will nullify the perceived penalty.

If it does not, then you need to delete your already filled out form 2210 manually, and repeat this portion of the interview again. I had to, and it worked flawlessly.
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Topic Author
grettman
Posts: 466
Joined: Mon Sep 29, 2014 1:47 pm

Re: H&R Block Tax Software and Underpayment Penalty

Post by grettman » Sun Mar 31, 2019 7:36 am

joylesshusband wrote:
Sat Mar 30, 2019 9:48 am
grettman wrote:
Sat Mar 30, 2019 6:17 am
I really don't know what to do here but the software is only giving me a choice to calculate the penalty myself or to have the IRS do it. I want NEITHER because I am above the threshold. Please help.
A total non-issue.

I have and used the HR Block for 2018 taxes. You need to merely select the "calculate the penalty myself" option, and then keep answering the interview from there. The software will apply the 80% threshold automatically, will check the box for the 80% waiver, and will nullify the perceived penalty.

If it does not, then you need to delete your already filled out form 2210 manually, and repeat this portion of the interview again. I had to, and it worked flawlessly.
I feel really dumb. Deleting the form is exactly what I needed to do. Thank you so much.

Monster99
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Re: H&R Block Tax Software and Underpayment Penalty

Post by Monster99 » Sun Mar 31, 2019 11:07 am

The software has been updated - I missed this year due to some unexpected distributions but was above 80%. I just filled out form 843 to get my 17 bucks back....🙂

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