Hi, would appreciate some advice on whether I should be concerned about a tax penalty for 2018.
I withheld enough last year and received a refund back for 2017, but when my income increased in 2018, I didn't realize that I should have changed my witholding/allowances accordingly. A colleague mentioned that I should have been making estimated tax payments quarterly to avoid a tax penalty. After running my estimated 2018 tax scenario, I believe I should owe about $1050 for federal in addition to the amount already withheld.
According to the IRS website, " Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and refundable credits, or if they paid withholding and estimated tax of 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 ."
I'm confused by the wording...I owe more than $1000 ($1050 or so) but I've paid 96% of my tax due by what was withhed from paychecks this year. Thoughts?
Submitted December 26, 2018 at 11:09AM by twy041vgz http://bit.ly/2EPfrIn
