'I just completed my federal taxes and owe money, i have a question about why there is an interest & penalty amount added to what i owe?.'

smlstriperquest- — Tue, 10 Feb 2026 10:42:41 GMT

Re: 'I just completed my federal taxes and owe money, i have a question about why there is an int...

JohnB5677 — Mon, 26 Feb 2024 17:19:00 GMT

There are IRS guidelines on when you will be charged a penalty or interest.

You must make timely payments. A large payment towards the end of the year is not timely. The IRRS expects a payment each quarter.

Please see if Estimated taxes are right for you.

In addition, you can avoid the penalties with these guidelines.

The amount of tax you paid during the tax year is less than 90% of the tax that you owed for the current year.
The amount you paid during the tax year did not equal 100%, (110% for higher incomes) of your taxes owed the prior year.
The IRS also says you can probably avoid the penalty if the amount you owe is less than $1,000, after subtracting withholding and refundable credits.

"Typically, underpayment penalties are 5% of the underpaid amount, and they're capped at 25%. Underpaid taxes also accrue interest at a rate that the IRS sets annually."

To avoid this situation it is recommended that you adjust your W-4 with your employer or pay estimated taxes.

Underpayment of Estimated Tax by Individuals Penalty

topic 'I just completed my federal taxes and owe money, i have a question about why there is an interest & penalty amount added to what i owe?.' in Get your taxes done using TurboTax

'I just completed my federal taxes and owe money, i have a question about why there is an interest & penalty amount added to what i owe?.'

Re: 'I just completed my federal taxes and owe money, i have a question about why there is an int...