The 2018 tax season was one for the record books. There were sweeping changes made to the tax law, which the IRS has still not fully explained. In fact, in 2019 we received regulations that are completely contrary to what we had received as regulations in 2018. And, the IRS issued tax withholding tables that weren’t exactly accurate.
It’s this latter situation, IRS tax withholding that wasn’t adequate, that the IRS has now said they’ll help do something about. Normally you must pay at least 90% of what you owe for a given tax year before filing. Otherwise you will pay an underpayment penalty from the IRS. However, the IRS has issued a waiver of that penalty if you paid at least 80% of your 2018 tax liability. The IRS estimates that this will affect 400,000 American taxpayers. If you paid a penalty that you don’t think was fair, talk to your CPA or tax preparer.
Tomorrow, I’m going to talk about another way you can get your penalties waived.