For tax year 2019 I had to Pay $998. What can I do so that I do not pay for 2020?

[xmasbaby0]

We do not know why you owed the tax due.  We cannot see any of your information.  We do not know if something out of the ordinary happened with your finances in 2019 or if you simply did not have enough tax withheld from your paychecks during the year.  if you did not have enough withheld, and did not change anything, then there is not a lot of 2020 left in which you can change much.  You can change the amount your employer withholds by filling out a new W-4 at work.  It will make your take home amount smaller, but can affect how much you owe at tax time.

There are a lot of variables that affect your refund or how much you owe.  We cannot see your returns.  Put 2018 and 2019's returns side by side and compare them to see what was different.  It will be tricky since the line numbers changed for those two tax years---the Form 1040's changed.

And try the taxcaster tool to get an idea of how your 2020 may look.  Although  it is for 2019 the tax laws are pretty much the same for 2020 for estimating purposes.

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

[Carl]

Well, you could quit your job so that you don't have any earned taxable income for 2020. But seeing that the tax year is almost over, it's probably to late for that. 🙂

Take a look at your 2019 tax return, line 16 of the 1040. That amount is your total tax liability for the 2019 tax year.

Line 17 shows the amount of taxes withheld from your paychecks. If line 17 is lower than line 16, then you need to complete a new W-4 and increase your withholding from each paycheck. (lines 18a thru e not discussed here for simplicity) But for 2020 this late in the year it probably wouldn't help much.But you might want to go ahead on your own and send say, $500 or so to the IRS "RIGHT NOW". You can do that at www.irs.gov/payments.  The reason you want to do this, is because if at tax filing time you owe the IRS $1000 or more than 10% of your total tax liability (whichever is HIGHER) then you will be assessed an underpayment penalty for not having enough withheld from your paychecks during the year.

If you do make a payment to the IRS, *PRINT* *YOUR* *RECEIPT* and keep it with your records for your 2020 taxes. Three rules to always remember when dealing with the IRS.

1) You are guilty until proven innocent.

2) The burden of proof is in the accused (that's you!) and not the accuser.

3) If it's not in writing, then it *did* *not* *occur*.

[rjs]

If you adjust your withholding for the remainder of 2020, be sure to check it again at the beginning of 2021. What you do for the remaining months of this year will probably not be appropriate for a full year.

You can use the Tax Withholding Estimator on the IRS web site to figure out what to put on the W-4 form that you give to your employer. It will let you adjust your withholding to get the approximate refund amount that you want.

[tagteam]

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@Carl wrote:

....if at tax filing time you owe the IRS $1000 or more than 10% of your total tax liability (whichever is HIGHER) then you will be assessed an underpayment penalty....

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You will not owe a penalty for underpayment, if you owe less than $1,000 in tax after subtracting withholding and credits, or if you paid at least 90% of the tax for the current year, or 100% (110% for those with higher AGIs)  of the tax shown on the return for the prior year, whichever is smaller.

[Anonymous]

no one knows where you stand for 2020 - your eventual tax liability as compared to your withholding and estimated tax payments.   if you can project your taxable income for the year, then use the appropriate tax rate schedule to estimate your tax liability.  compare that to your projected withholding and estimated tax payments for the year. if it looks like you'll owe you can either ask your employer to up your withholding or make an estimated tax payment. withholding is better because you can spread it out evenly over the year even though it wasn't evenly withheld throughout the year whereas the estimate is deem paid for the quarter it is actually apid in which as of now would be the 4th quarter. note as others have said if your projected tax less withholding is less than $1,000 no penalty.  if your withholding and timely estimated tax payments are 100% (110% if your AGI for 2019 is over $150,000) of your 2019 tax or 90% of 2020 tax there are no penalties regardless of what you might owe. 

https://www.troweprice.com/personal-investing/resources/planning/tax/preparation/tax-rate-schedules....