MonikaK1
Expert Alumni

After you file

Yes, if you paid more in tax for 2023 than you owed for 2022, this can explain why you are not seeing a penalty. Generally, most taxpayers will avoid the underpayment penalty if they either owe less than $1,000 in tax after subtracting their withholding and refundable credits, or if they paid withholding and estimated tax of at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller.

 

You can either adjust your withholding on wages or another type of regular income such as pensions, or make estimated payments if you are not on track to pay at least 90% of what you expect to owe for 2024. 

 

See IRS Topic 306 for more information.

 

 

 

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