Welcome Guest. Register Now!  

LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 11-29-2008, 03:32 AM
TaxGuru's Avatar
Tax Guru
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,399
Blog Entries: 3
How can I reduce the underpayment penalty in 2008?

Well, the if you are being confronted with a potential underpayment penalty, tax experts suggest that you increase your withholding in the month of December 2008!

By taking more out of your paycheck would be the most efficient method to avoid a penalty. As such, a taxpayer need not have to pay the entire tax they expect to owe by the end of the tax year. The minimum amount that is required to be prepaid is 90% of the tax year 2008 year’s tax liability, and by doing so, the taxpayer would incur no underpayment penalty.

Alternatively, the taxpayer would not incur any underpayment penalty by prepaying 100% of his 2007 tax liability (110% if your AGI for 2007 topped $150,000)!

Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.

Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
How can a Taxpayer avoid the underpayment penalty? TaxGuru For 2008 0 11-06-2008 01:04 PM
Question about IRS penalty accessment gigic Income 1 07-14-2008 12:00 PM
Will the IRS reduce the Rebate check to me if I owe back taxes? disa Miscellaneous 1 02-24-2008 10:55 PM
IRS reduces Interest Rate on underpayment by 1% for 1st Quarter 2008! TaxGuru Estimated Taxes 0 11-29-2007 01:15 AM
What deductions are available to reduce the Estate Tax? TaxGuru Estate Planning 0 08-26-2007 09:53 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 » Income
 » IRA/Sep
 » Medical
 » Payroll
Forum for CPAs
Financial Planning