I don't pay estimated taxes. I'm just a w-2 employee. Why do I have an underpayment penalty?

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Generally, if you don't have enough withheld in taxes as you earn income throughout the year, then you could still be subject to an underpayment penalty. I recommend updating your W-4 withholding statement with your employer to ensure you have enough withheld from your paychecks to avoid the penalty in the future.

Also see why am I getting an underpayment penalty for more details.

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