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Question

Hello, we have an underpayment penalty this year of $150. Both my husband and myself have an extra $25 taken out of each of our checks every week and bi-weekly. What's up

Forum|Forum|1 year ago
March 1, 2025
1 reply
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The underpayment penalty typically happens when you haven't paid enough tax throughout the year through withholding or estimated tax payments. Even with the additional $25 being withheld from each paycheck, it appears your total withholding for the year still wasn't enough to avoid the penalty.

For married couples filing jointly, sometimes switching to "Married but withhold at higher Single rate" on your W-4s can help prevent future penalties.