The IRS is expanding tax underpayment penalty relief
For taxpayers facing underpayment penalties this tax season, the Internal Revenue Service is upping the relief it’s already provided. That’s welcome news, albeit late., the IRS expands penalty relief to those whose withholding and estimated tax payments total at least 80% of the tax shown on the return for the 2018 tax year. The Notice also updates procedures for requesting a penalty waiver, and it explains how to get a penalty refund if you’ve already filed.
You have to pay federal income taxes as you earn income—through wage withholding or quarterly estimated tax payments . The rule is pay in at least 90% of the tax you owe or 100% of the tax you owed in the prior year . Or else, you owe a penalty. “It’s a help,” says Morris Armstrong, an enrolled agent in Cheshire, Connecticut, who had clients benefit from the earlier relief. Now he’s reviewing their returns to see if they apply for the additional relief.
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