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?
No one has been working at the IRS for the past 3 weeks. Party time ššŗš¼š
Sheeeeeit
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%)).
22% after the Trump tax "cut"
OP didnāt reference a stock sale. Clearly they derive revenue from a side gig.
Correct
Thatās 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. Youāll still owe the tax but donāt have to pay the āinterestā penalty on it. But I think you already knew that based on your question.
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Donāt take tax advice from Blind.