Discussion:2006 Underpayment penalty proof assistance
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Discussion Forum Index --> Tax Questions --> 2006 Underpayment penalty proof assistance
Vermontcpa (talk|edits) said: | 13 January 2007 |
| Am i right that if Single taxpayer pays equal to total tax liability from 2005 in 2006 that there is no risk of underpayment penalty?
This assumes AGI < $100k What if taxpayer withholds equal to 2005 tax liability but in 2006 upon filing still owes > 10% of 2006 total tax liability? I am calculating here and what to bounce this off the experts here. Thanks | |
| 13 January 2007 | |
| Is the 2006 liability less or more than the 2005 liability? BTW: I LOVE VERMONT!!! Go Patriots!! | |
| 13 January 2007 | |
| If the increase is more than $40,000. est payments s/b made. | |
| January 13, 2007 | |
| In your case (and not married separate), if the 2005 total tax was paid in 2006 through withholding and/or quarterly payments, and then taxpayer owes more than 10% of the 2006 tax, there will be no penalty for underpayment of estimated tax. See page 1 on Form 2210 Intructions under Who Must Pay the Underpayment Penalty. | |
| January 13, 2007 | |
| Also, see Waiver of Penalty in the same instructions for certain exceptions. | |
Death&Taxes (talk|edits) said: | 13 January 2007 |
| The taxpayer is safe; 100% of 2005 taxes was paid equally, as I read your question. It is only a question of when he wants to pay the liability. You might alert him to the fact he might also have a first quarter 2007 payment to make based on final numbers. | |
| January 13, 2007 | |
| Blrg - I think the $40,000 rule no longer applies. I haven't seen anything about that in a few years. Am I missing something? Also, see 1040-ES Form and Instructions | |
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