@swegmike wrote:
is it possible to get around the quarterly payments by reducing # of dependents? I did this by reducing from myself to zero so that more tax is with held. Why pay more than I have to since I would get some of it back, but the state doesn't pay me interest on this difference that I over estimated so that could reduce the tax penalty.
When i do fill out the taxes, the penalty worksheet isn't filled in so that I can submit the penalty with the tax as a total sum. Thus, one gets letters from the state two months later and it should've of just added it onto the tax bll to begin with.
Two questions here.
1. Yes, if you increase your job withholding, that should prevent a penalty. The goal is for the IRS and state to get between 90% and 100% of the tax you will eventually owe, spread out over the year rather than only paying at the end. If you have more tax taken out of your paycheck instead of making separate payments, that will accomplish that goal.
2. You should be able to manually access and fill out the penalty form, even if it is not given to you automatically. I know that on the federal side, the program will ask you something like "It doesn't look like you owe a penalty but would you like to calculate one just in case?" and then you can run the interview and complete the form. I don't know exactly how it works in the VA state module, but it will be there someplace.
Also, any penalty calculation on your tax return (federal or state) is always just an estimated penalty, and is usually off a little bit plus or minus from the official calculation. So you could still get a bill or refund for a few dollars.
