Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 03-08-2009, 01:38 PM
Junior Member
 
Join Date: Mar 2009
Posts: 1
Underpayment Penalty - $1025 REPAY

Hi,

Normally I always get 2-3 k tax REFUND from the IRS EVERY YEAR.

But this year it looks like I have to pay back abt S1025 to th eIRS as my wife also joined the work force and may be her deductions were quite not right.

How do I aviod the penalty when our total income is less tha 100 K.

Thanks,

Jag



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
  #2 (permalink)  
Old 03-08-2009, 01:45 PM
TaxGuru's Avatar
Tax Guru
 
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,400
Blog Entries: 3
You may be able avoid this penalty if you owe less than $1,000 in tax after subtracting their withholdings and credits, or if you 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.

Generally, these payments should be made in four equal amounts to avoid a penalty. The IRS has stated that if you made unequal payments because your income was received unevenly during the year, you may be able to avoid or lower the penalty by annualizing your income. Use Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts, to see if you owe a penalty for underpaying your estimated tax.

There are some circumstances where the IRS has specifically mentioned that may waive the penalty if:

1) "The failure to make estimated payments was caused by a casualty, disaster, or other unusual circumstance and it would be inequitable to impose the penalty."

2) "You retired (after reaching age 62) or became disabled during the tax year for which estimated payments were required to be made or in the preceding tax year, and the underpayment was due to reasonable cause and not willful neglect."

__________________
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
Ads
Reply



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 I reduce the underpayment penalty in 2008? TaxGuru For 2008 0 11-29-2008 03:32 AM
How can a Taxpayer avoid the underpayment penalty? TaxGuru For 2008 0 11-06-2008 01:04 PM
Roth IRA – Withdrawal and Penalty lwebinc IRA/Sep 1 07-14-2008 12:22 PM
Question about IRS penalty accessment gigic Income 1 07-14-2008 12:00 PM
IRS reduces Interest Rate on underpayment by 1% for 1st Quarter 2008! TaxGuru Estimated Taxes 0 11-29-2007 01:15 AM

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

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