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Level 3
posted Apr 1, 2025 5:07:48 AM

Can I Avoid the "Underpayment of Tax" Penalty?

For tax year 2025, if I make quarterly estimated tax payments that result in my tax due being under $1,000, will this avoid the "Underpayment of Tax" penalty?  Please advise.  Many thanks.

0 2 373
2 Replies
Employee Tax Expert
Apr 1, 2025 5:09:56 AM

Yes.

 

Please read this IRS document for more information.

Level 15
Apr 1, 2025 6:41:06 AM

"result in my tax due being under $1,000,"

 

Estimated Tax payments do not work for this test.

Only withholding can be used to bring the amount you owe below $1,000 and escape penalty.

 

 

If you find a penalty on Line 38, See Form 2210 Schecdule AI if you want to try to reduce that penalty.

 

@BTRR