Question

Estimated Tax Underpayment With an Installment Agreement

Forum|Forum|5 years ago
May 16, 2021
1 reply
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Hello,

If a taxpayer has a guaranteed installment agreement and they end up owing a modest underpayment penalty for not paying estimated tax, is this generally cause for default as seemingly hinted under "How the Installment Agreement Works"? Once the return is filed and paid, presumably the "tax obligation for future years is paid in full when payment is due", unless that technically includes paying estimated tax payments on time. Just a bit vague. Opinions? Thanks!

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DavidD66

You don't need to worry about a small penalty for underpayment of estimated tax when you have an installment agreement. You will be fine, especially if you pay the tax and penalty, on time when you file.

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optx103Author

Thank you for the response. I removed the word "enough" from my post because they actually didn't pay any. But the penalty is about 20 bucks, so I'm guessing same diff. Thanks again.