AmyC
Expert Alumni

Retirement tax questions

Use the annualized income method. This allows you to report your income by quarter, showing the income was later in the year to help reduce the penalty. The IRS charges penalties if you owe over $1,000. The IRS treats a debt of $5,000 as substantial underpayment with additional penalties and interest.

You may need to withhold more or make estimated payments when your income goes up. A big stock sale, make a payment. Sell a building, make a payment. You can make Payments anytime. If you end up owing more than you can pay,  Apply Online for a Payment Plan.

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