topic Underpayment penalty and estimated taxes in Retirement tax questions

Underpayment penalty and estimated taxes

FinallyInSeattle — Wed, 17 Mar 2021 18:54:14 GMT

I understand the rule of paying either 100% of last year's taxes or 90% of current year's taxes to avoid a penalty.

Do I avoid a penalty if I reach 90% of what I owe in the last estimated tax payment of the year or is there a penalty for not paying enough earlier in the year?

Re: Underpayment penalty and estimated taxes

PattiF — Wed, 17 Mar 2021 19:14:29 GMT

Yes, there is a penalty for not paying enough throughout the year, The IRS has been enforcing this more in the last few years.

Here is some information from the iRS: