Making estimated payments are a great way to not owe so much when filing your taxes and to avoid the underpayment penalties.
There are two ways to avoid the underpayment penalty;
You can avoid the penalty if your total timely estimated payments and withholdings are greater than or equal to the lesser of:
- 90% of the total tax after credits for the current year, or
- 100% of the total tax after credits in the prior year
Of course it's hard to estimate 90% of the current year tax, so best to go with second option.
https://turbotax.intuit.com/tax-tips/irs-tax-forms/what-is-form-2210/L2z0haVWb
I hope you find this helpful!
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
