vakuna
New Member

Tax copies shows form 2210 included. Don't understand why and what to do now.

 

Get your taxes done using TurboTax

Relax.  You don't have to do anything with your 2018 tax return.

Our income tax system is a "pay as you go" system.  This means that as you earn income, you should be paying an appropriate amount of income tax along with it.  For those with just one job and no other significant income, payroll withholding handles this automatically.   However, if you, for example, work two jobs, often not enough tax is withheld.  This is because tax rate percentages increase with increasing income, the so-called tax brackets.  Each employer only withholds at the lower rate for the one job they see, leading to a shortfall.

For 2018, if your payroll withholding totaled less that 80% of the calculated federal tax (after subtracting various credits), then you are considered significantly underpaid and Form 2210 kicks in to calculate extra penalty interest for the periods of time during which you were significantly underpaid.  This penalty underpayment is calculated using a target of 90% of the federal tax.  (I know, why 90% when 80% is the threshold?  That's because the legal threshold has always been 90% but the new tax law changes caused so many problems that the IRS cut it first to 85% and then further to 80% just for 2018.)

I strongly suspect your Form 2210 is there purely to invoke the 80% exemption from penalty interest.  Just look to see if the 80% box was checked.

As I don't know your specific situation, I would need more information about your sources of income in order to advise you as to how to avoid being significantly underpaid in the future.  Best if you let me know prior to April 15th so that you can make an  estimated tax payment if needed.