Tax Tip - January 24, 2019
by cehassinger on Jan 24, 2019
By Colleen M. Henes, CFP®, JD
Financial Advisor, Advanced Planning
Are you worried that you may not have paid enough federal taxes due to the new tax law?
Good news! The IRS has lowered the estimated tax penalty threshold for taxpayers whose 2018 federal income tax payments (either through withholding, estimated tax payments or a combination of the two) fell short of their total tax liability for the year. Typically, taxpayers are required to pay at least 90 percent of their total tax liability to avoid a penalty, but if you paid at least 85 percent during the year then the IRS will waive the penalty. Per the IRS, this relief is “to help taxpayers who were unable to properly adjust their withholding and estimated tax payments to reflect an array of changes under the Tax Cuts and Jobs Act (TCJA)."