Money

Avoiding tax underpayment

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6d

Am I correct that no matter how much tax I owe this year, as long as I've had withheld at least 110% of tax owed prior year, I cannot be penalized for tax underpayment?

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  • Google RockLobsta
    Don’t take tax advice from Blind.
    6d0
  • Twitter 🐒。
    No one has been working at the IRS for the past 3 weeks. Party time 💃🕺🏼🎉
    6d1
    • New / Product
      llluminati

      NewProduct

      BIO
      I make stuff and I’m super into it.
      llluminatimore
      Sheeeeeit
      6d
  • Salesforce 2438ez
    That’s how I understand it. Note that withheld does not include any expected payments you may have made. Also, avoiding the penalty is not the same as avoiding the tax. You’ll still owe the tax but don’t have to pay the “interest” penalty on it. But I think you already knew that based on your question.
    4d0
  • Facebook public2
    Correct
    6d0
  • Veritas tvCf60
    ^^^What Rock said. You can easily Google the answer.

    https://www.irs.gov/publications/p505
    6d0
  • Google YTpM41
    No! Companies are only allowed to withhold 25% of stock sale revenue regardless of your tax bracket. That means if you sold $10k in stock and are in the 30% tax bracket, you will be on the hook for $500 extra dollars unless you do estimated tax payments ($10k * (30% - 25%)).
    6d3
    • Google / Eng
      prodaccess

      GoogleEng

      BIO
      Top Contributor or GTFO
      prodaccessmore
      22% after the Trump tax "cut"
      6d
    • New DuQvV7x
      OP didn’t reference a stock sale.

      Clearly they derive revenue from a side gig.
      5d
    • Google YTpM41
      Why is your assumption any better than mine? OP didn't say anything.
      5d

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