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Penalty For The Underpayment Of Estimated Taxes

Penalty for the underpayment of estimated taxes

  • You’re supposed to pay quarterly taxes every single quarter. Those quarterly dates are a little funny. The first one’s due April 15th, then June 15th, then September 15th.
  • If you underpay your estimated taxes, there could potentially be penalties and interest for that underpayment. You need to pay in either 90% of whatever your current year tax bill is, or it’s 110% of the previous year.
  • Previous year could be lower or higher. It could be all sorts of different things, so you and your CPA really need to work out, probably at least once a quarter about what your quarterly taxes.

Tax Goddess is here today about the underpayment of your estimated taxes. A lot of our clients don’t really necessarily know that you’re supposed to pay quarterly taxes every single quarter, right. Those quarterly dates are a little funny. The first one’s due April 15th, then June 15th, then September 15th. You’ll notice June and September 15th are actually in the middle of a quarter, which is kind of strange, but those are due quarterly. The last one due January 15th of the following year.

If you underpay your estimated taxes, there could potentially be penalties and interest for that underpayment. You need to pay in either 90% of whatever your current year tax bill is, so at this point, it’d be 90% of whatever your 2017 tax bill is, or it’s 110% of the previous year, so 110% of the previous year could be lower, it could be higher. It could be bigger dollars, smaller dollars. It could be all sorts of different things, so you and your CPA really need to work out, probably at least once a quarter, what your quarterly taxes actually are.

If you have any questions on this, feel free to reach out to our team here at Tax Goddess. Always willing to help you calculate those quarterly estimates, make sure that you’re not paying any underpayment penalties on your quarterly estimates, and of course, if you need any strategic tax planning or other tax type advice, for you business owners out there, definitely let us know.

Hope you’re having a great day and looking forward to answering any of your questions on any tax topic. Feel free to write into us on Facebook or Twitter or LinkedIn or on our blog or, of course, you can email us at info@taxgoddess.com. Hope you’re having a great day and we’ll talk to you later.

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PLEASE NOTE: As of late Aug 2018 there was a proposed law change that would disallow a double deduction for these charitable credits at the federal level for contributions made after Aug 2018. You are still eligible for the AZ state tax credits as the change would only impact your ability to take them as charity donations at the federal level.
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