Additionally, if your income increased significantly after August 31,2015, your tax preparer may be able to reduce underpayment penalties
by annualizing your estimated tax liability.
Moreover, if you are expecting an increase in profitability because of lower oil prices (or for any other reason), you should review your estimated tax strategy to make sure you avoid underpayment penalties
Attached to it were mandatory accuracy-related and underpayment penalties
, as well as payment-failure and file-failure penalties, which often amounted to 50 per cent of the tax that was owed.
539 (2011), the IRS assessed substantial underpayment penalties
on two commonly controlled corporations that failed to self-assess the personal holding company tax.
Thus, if the employer's taxes were underpaid because employment taxes were omitted, the IRS may assess underpayment penalties
TEI's overarching concerns with these regulations are the potential they pose for (1) substantially increasing compliance costs without a commensurate improvement in the quality of information supplied to the IRS, (2) increasing uncertainty for taxpayers, and (3) heightening the risk of underpayment penalties
for foot faults relating to inadvertent failures to file disclosure statements for reportable transactions.
It is possible for some taxpayers to avoid or reduce underpayment penalties
by contributing to an IRA and thus reducing their taxes owed.
Because the estate had not used a qualified appraiser, relying instead only on the buy-sell agreement, they were liable for underpayment penalties
What about underpayment penalties
if taxpayers do not satisfy the safe-harbor rules?
Be sure you're properly paid up through withholding (usually the best way) or estimated payments to avoid underpayment penalties
Otherwise, they could owe underpayment penalties
when they file their tax return for the year at issue due to the withholding shortfall.