Withholding Penalty

TimG3 · ‎March 9, 2022

I had a large amount of taxable dividends that I wasn't expecting in 2021. I did not have enough withholding to cover the taxes from the dividends so the federal taxes I owe are about $12,500. Will I be penalized for not having enough withholding. When filling out my Turbo Tax return (which I haven't filed yet), I called a Turbo Tax agent and she said I would not be penalized but a friend said I would have a penalty.

If I do have a penalty, is there a form I can complete to plead my case of being new to this?

Thank you,

TimG3

MayaD · ‎March 9, 2022

Most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and refundable credits, or if they paid withholding and estimated tax of 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.

If you want to see if if you can reduce the penalty, follow the steps in the link below:

How do I add Form 2210?

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