I just finished my taxes and apparently I underpaid this year. I normally get a refund to the tune of thousands of dollars. I checked my last 10 years of taxes, and 2 years ago I owed $78, and several years before that I only got back $93. EVERY other year I received an average of $1500-4000 back. This year TT says I owe $5000, and a $142 underpayment interest penalty.
My question is how would I ever know to change my withholdings? I am 53 years old and live in California. One of my 2 dependents aged out, and I got a raise of about $4000-5000, but wow, what a change in taxes due! Can I petition the IRS to waive the underpayment penalty?
Also, TT (really, probably the IRS) is requiring me to pay estimated taxes for the upcoming year. I already changed my W4 (using the IRS W4 estimator tool) and just submitted it to my employer today. Am I stuck making estimated payments for this year and just have to expect a very large refund next year (since I already changed my W4 and would still be making estimated payments). If I make estimated payments this year, and I required to continue making them every year from now on? Thanks
