estimated tax penalties

[jimi4158]

How are estimated tax penalties computed? i have two clients with practically identical returns except for estimated payments,  one with taxable income of $724386 that owes $96863 with penalty $53 and the other with taxable income of $724021 that owes $50759 with penalty of $598. 

[jeffmcpa2010]

Might depend how the prior year tax compares to current year withholding and estimated tax payments.

Go through the 2210 and worksheets carefully and you may find a difference in there somewhere.

[Just-Lisa-Now-]

how much was the tax liability for each person in 2020?

[jimi4158]

client with $598 penalty tax liability $147285

client with $53 penalty tax liability $142098

[jeffmcpa2010]

And what were their 2021 Withholding/Estimated payments?

[jimi4158]

client 1 with $598 penalty had no withholding, self employed, estimated payments of $97124.

client 2 with $53 penalty had withholding of $1942 and self employment estimates of $45288

[jeffmcpa2010]

Print the 2210 worksheet for each of them and go through them side by side, particularly part III and see if you can see a pattern which illuminates your difference to you.

[ALAN S]

Maybe they paid estimates at different times during the year. And that compared to withholding, and compared to last year's tax liability

[jimi4158]

thanks for the input, return has been filed but i will continue to review for answers

[jimi4158]

pay dates for both clients are the same, 4-15-21, 6-15-21, 9-15-21, 12-31-21.