Tax Underpayment penalty

[km8644]

Doing some prep for 2023 tax.

There will be taxes due but estimated taxes equal to last year's tax liability have been paid.

The documentation says taxes withheld must be 100% of 2022 tax liability if AGI is up to $150K (amount is $75K if married filing separately).  What about filing single?  Is it the $150K threshold.

[Critter-3 · Accepted solution]

There will be no federal penalties for not paying in enough taxes during the year if withholding...
1) and timely estimated tax payments equal or exceed 90% of your 2023 tax or
2) and timely estimated tax payments equal or exceed 100% of your 2022 tax (110% if your 2022 adjusted gross income was more than $150K) or
3) the balance due after subtracting taxes withheld from 90% of your 2023 tax is less than $1,000 or
4) your total taxes are less than $1,000

the lower of 1 or 2 is your required annual income tax payment. 1 is difficult to know until the year-end so generally option 2 is the safer option. Under the simplified method 25% of the estimated taxes must be paid in each period by 4/18, 6/15, 9/15 and 1/15/24. Unless you can show otherwise 25% of your annual withholding is assumed to occur in each period.

[Anonymous_]

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@km8644 wrote:

What about filing single?  Is it the $150K threshold.

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Yes. It's $75k only if your filing status is MFS.

[Mike9241]

single is 150K