Investors & landlords

there is a way to avoid penalties no matter how much your income taxes increase over the prior year.

1) withholding and timely estimated tax payments for 2021 equal or exceed 90% of your 2021 tax. 

trying to determine what this will be is usually difficult so the IRS gives you another option

2) withholding and timely estimated tax payments for 2021 equal or exceed 100% of your 2020 tax. the 100% becomes 110% if your 2020 adjusted gross income is $150,000 or more.  This is the option most commonly used to avoid penalties 

 

to avoid estimated tax payments you can revise your w-4 so your withholding will hit  the target in 2) above