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Level 3
posted Oct 15, 2022 8:04:32 PM

How to prevent paying tax penalty next year

I ended up having to pay a tax penalty this year because I underpaid my taxes. Is there a way to try to calculate whether or not I'll need to pay a penalty next year, and if so, can I pay taxes now (in 2022) to avoid a penalty?

I have never made estimated tax payments. Is it possible to increase withholding of our December 2022 paycheck to pay more taxes if we need to?

How can I calculate whether or not we are underpaying?

0 2 435
2 Replies
Level 15
Oct 15, 2022 8:34:01 PM
Level 15
Oct 16, 2022 7:24:02 AM

IRS revised W4 from couple of years ago and in the new form instead of claiming number of exemptions, you have to calculate and enter dollars.

To maximize the every paycheck net take home pay, please update and submit a new W4 form. Here is your link to IRS withholding estimator