Both during the federal and CA state process, I was notified that there are penalties being levied for tax liabilities. As far as I can make out from my 2019 return, there shouldn't be any penalties. What should I be looking for or reviewing in order to set this right?
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The federal underpayment penalty generally applies when you owe more than $1,000 in federal tax on your tax return. Per the IRS, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and estimated tax payments, or if they paid at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller.
To review your federal underpayment, please follow the instructions below:
For California, you will be assessed an underpayment penalty if:
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