{"id":14914,"date":"2019-01-17T09:45:48","date_gmt":"2019-01-17T15:45:48","guid":{"rendered":"https:\/\/taxprocenter.proconnect.intuit.com\/?p=14914"},"modified":"2019-02-08T10:47:39","modified_gmt":"2019-02-08T16:47:39","slug":"irs-waives-underpayment-penalty-for-certain-taxpayers","status":"publish","type":"post","link":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/irs-waives-underpayment-penalty-for-certain-taxpayers\/","title":{"rendered":"IRS Waives Underpayment and Underwithholding Penalty for Certain Taxpayers"},"content":{"rendered":"<p>The <a href=\"https:\/\/www.irs.gov\/newsroom\/irs-waives-penalty-for-many-whose-tax-withholding-and-estimated-tax-payments-fell-short-in-2018\"title=\"\"  target=\"_blank\" rel=\"false noopener\" data-wa-link=\"body_irs-waives18penalty\" target=\"_blank\">IRS announced<\/a> that it is waiving the estimated tax penalty for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year.<\/p>\n<p>The IRS is generally waiving the penalty for any taxpayer who paid at least 85 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two. The usual percentage threshold is 90 percent to avoid a penalty.\u00a0The waiver computation will be reflected in the forthcoming revision of <a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/f2210.pdf\"title=\"\"  target=\"_blank\" rel=\"false noopener\" data-wa-link=\"body_irs-f2210\" target=\"_blank\">Form 2210<\/a>, <em>Underpayment of Estimated Tax by Individuals, Estates and Trusts<\/em>, and instructions.<\/p>\n<p>This relief is designed to help taxpayers who were unable to properly adjust their withholding and estimated tax payments to reflect an array of changes under the <a href=\"https:\/\/proconnect.intuit.com\/tax-reform\/\"title=\"\"  target=\"_blank\" rel=\"false noopener\" data-wa-link=\"body_taxreform\">Tax Cuts and Jobs Act<\/a> (TCJA).<\/p>\n<p>\u201cWe realize there were many changes that affected people last year, and this penalty waiver will help taxpayers who inadvertently didn\u2019t have enough tax withheld,\u201d said IRS Commissioner Chuck Rettig. \u201cWe urge people to check their withholding again this year to make sure they are having the right amount of tax withheld for 2019.\u201d<\/p>\n<p>The updated federal tax withholding tables, released in early 2018, largely reflected the lower tax rates and the increased standard deduction brought about by the new law. This generally meant taxpayers had less tax withheld in 2018 and saw more in their paychecks.<\/p>\n<p>However, the withholding tables couldn\u2019t fully factor in other changes, such as the suspension of dependency exemptions and reduced itemized deductions. As a result, some taxpayers could have paid too little tax during the year, if they did not submit a properly-revised <a href=\"https:\/\/taxprocenter.proconnect.intuit.com\/tax-law-and-news\/irs-releases-updated-withholding-calculator-and-new-form-w-4\"title=\"\"  target=\"_blank\" rel=\"false noopener\" data-wa-link=\"body_tpc-irsnewwhCalc\">W-4 withholding<\/a> form to their employer or increase their estimated tax payments. The IRS and partner groups conducted an extensive outreach and education campaign throughout 2018 to encourage taxpayers to do a \u201c<a href=\"https:\/\/www.irs.gov\/paycheck-checkup#_blank\"title=\"\"  target=\"_blank\" rel=\"false noopener\" data-wa-link=\"body_irs-paycheckCheckup\" target=\"_blank\">Paycheck Checkup<\/a>\u201d to avoid a situation where they had too much or too little tax withheld when they file their tax returns.<\/p>\n<p>Although most 2018 tax filers are still expected to get refunds, some taxpayers will unexpectedly owe additional tax when they file their returns.<\/p>\n<p>For more information, the Intuit\u00ae ProConnect\u2122 Tax Pro Center has many <a href=\"https:\/\/taxprocenter.proconnect.intuit.com\/tag\/tax-reform\/\"title=\"\"  target=\"_blank\" rel=\"false noopener\" data-wa-link=\"body_tpc-taxreform-cat\">articles<\/a> more information on tax reform and how it affects you and your clients.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Get the latest news from the IRS on how it is waiving penalties for certain taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year.<\/p>\n","protected":false},"author":104275893,"featured_media":78,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rkv_reviewed_by_select":[],"rkv_browse_by_id":0,"rkv_cta_id":0,"rkv_optimize_for_pagespeed":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"useModifiedDate":false,"customPublishDate":"","customModifiedDate":"","_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"{title}\n\n{excerpt}\n\n{url}","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false,"jetpack_post_was_ever_published":false},"categories":[509474089],"tags":[582953261],"intuit_collection":[],"intuit_series":[],"coauthors":[509474241],"class_list":["post-14914","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax-law-and-news","tag-tax-reform"],"header_image":"","yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.3 (Yoast SEO v27.7) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>IRS Waives Underpayment Penalty Explained<\/title>\n<meta name=\"description\" content=\"The IRS waived the underpayment and underwithholding penalty for certain taxpayers who did not have enough tax withheld. 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