Underpayment of taxes

[MarieIG]

True. Good point. Thanks.

 

[HarveyS]

You said your son is 35, right?

 

[meleana]

You said your son is 35, right?

Yes. Why?

 

[indiajust]

I filed with 2210 exceptions many times, but that was because I claimed 8 exemptions to deliberately underpay and owe, which I preferred since my income was unpredictable but had high deductions with house.

They let me skate by for years by adding explanations. But when I got the letter and a small fine, I raised my withholding.

Ultimately I ended up alternating, since I could avoid fees if I went back and forth between break even and 2210 with exception.

The new withholding form seems to work better, but I have never used it. Seems odd that he filed 0 and owed, since that used to max out your tax withholding and guarantee a refund.

 

[meleana]

I filed with 2210 exceptions many times, but that was because I claimed 8 exemptions to deliberately underpay and owe, which I preferred since my income was unpredictable but had high deductions with house.

They let me skate by for years by adding explanations. But when I got the letter and a small fine, I raised my withholding.

Ultimately I ended up alternating, since I could avoid fees if I went back and forth between break even and 2210 with exception.

The new withholding form seems to work better, but I have never used it. Seems odd that he filed 0 and owed, since that used to max out your tax withholding and guarantee a refund.

The thing is - his weekend job is also unpredictable- but he does well there- better than his full time job and considering he only works 2 days as opposed to the 5 at the full time job- and he is single so just has the small standard deduction. He has no other deductions.


Both he and I don't understand the new withholding form. I'm old school with that stuff. LOL!


But as I said he is hesitant to do anything with the withholding on the full time job because he's not sure if he's staying there. And right now the part -time job is unpredictable- though for the past two years he seems to be earning more and more there.


So estimated taxes it is. Will go along with whatever tax act says when he files each year until something changes I guess.

 

[erkevin]

Due to higher interest rates (yay!) we had quite a bit more income through out the year (2022) in savings and CDs. As a result, I had to write a check for $1800. The underpenalty was $22.

 

[meleana]

Due to higher interest rates (yay!) we had quite a bit more income through out the year (2022) in savings and CDs. As a result, I had to write a check for $1800. The underpenalty was $22.

How do you know what the penalty is already? Tax Act didn’t say what the penalty would be or if there would be one at all and he owed $3000.

 

[erkevin]

Taxact told me the penalty. Did you use Taxact in previous years?

 

[meleana]

Taxact told me the penalty. Did you use Taxact in previous years?

Yes he did. He even owed last year $2000. No penalty came up but it was his first time owing over the allowed amount.

Could it be because he chose to do estimated taxes going forward when he filed this year?

 

[erkevin]

I can only guess that he qualified for safe harbor; his total tax liability for this year was about the same as last year, even though he had to pay $1000 more at tax time.

 

[RobbieB]

Turbo Tax informed me I have a $10 penalty for underpaying CA. Advised I could dispute it.

No thanks, not worth the effort -