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S
sjrudavsky
April 11, 2025
Question

We were assessed an $8 underpayment penalty even though our refund is greater than we paid in estimated payments. Can we avoid paying the penalty?

  • April 11, 2025
  • 1 reply
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    1 reply

    M
    Mike9241
    April 11, 2025

    there can be several different reasons for a penalty, even if you are getting a refund.

    1) A payment of estimated tax was not timely.

    2) 1/4 of your annual withholding + timely estimated tax payments were less than 25% 0f the minimum required payment for each period

    rather than using 1/4 of annual withholding for each period, the default,  you can check box D on the 2210 and enter actual withholding for each period to see if this reduces or eliminates the penalty.  

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