Money

Avoiding tax underpayment

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Jan 10

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.
    Jan 100
  • Twitter 🐒。
    No one has been working at the IRS for the past 3 weeks. Party time 💃🕺🏼🎉
    Jan 101
    • New / Product
      llluminati

      NewProduct

      BIO
      I make stuff and I’m super into it.
      llluminatimore
      Sheeeeeit
      Jan 10
  • 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.
    Jan 120
  • Facebook public2
    Correct
    Jan 100
  • Veritas tvCf60
    ^^^What Rock said. You can easily Google the answer.

    https://www.irs.gov/publications/p505
    Jan 100
  • 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%)).
    Jan 103
    • Google / Eng
      prodaccess

      GoogleEng

      BIO
      Top Contributor or GTFO
      prodaccessmore
      22% after the Trump tax "cut"
      Jan 10
    • New DuQvV7x
      OP didn’t reference a stock sale.

      Clearly they derive revenue from a side gig.
      Jan 11
    • Google YTpM41
      Why is your assumption any better than mine? OP didn't say anything.
      Jan 11

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