Question

I received a Form 1099-MISC but didn’t make a quarterly estimated taxes payment during the year. Will I owe an underpayment penalty?

Answer

Maybe. You might owe an underpayment penalty for tax underpaid if:

  • Your total tax for the current year minus withholding and credits is more than $1,000.
  • Your tax withholdings and credits are less than:Â
    • 90% of your current tax liability
    • 100% of your prior-year tax liability
    • 110% of your prior-year tax liability if your adjusted gross income (AGI) last year was more than $150,000 or $75,000 if you and your spouse file separately.

You’ll figure your penalty on Form 2210.

 

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