I received a CP30 letter on failure to pay proper estimated tax penalty. Why do I get that this year? If I understand correctly, it's the penalty for not putting enough tax withholding in my paycheck. I don't recall I had the option to decide the amount for withholding. It was all done by my employer. If they didn't put enough there, why am I getting the penalty?
Thanks for the info.
cpliu
You can always have more withheld from a job ... especially if you have income where there is no withholding ...
http://www.irs.gov/Individuals/IRS-Withholding-Calculator
https://www.irs.gov/individuals/understanding-your-cp30-notice
Thanks for the answer. This is the first time I got this penalty, why didn't I get it the previous years? Would losing the job in October and receiving an extra 3 months of pay has anything to do with it?
I only needed to tell HR the total person with x independent at the end of each year. I should use the estimator to compare the withholdings from both paycheck and estimate in IRS in the future then.
Thanks,
Yes ... having more income than normal can affect credits on the return so you would not have the same refund. Print off a copy of the 1040 for both tax years to see exactly what was different between the two tax years. If you don't understand the differences post back which lines on which form is confusing you.