I think I will have an underpayment penalty this year unless I do something, but was wondering if someone can clarify some points for me. Here is my situation: - Filing married jointly - My AGI (line 37) last year was less than 150K. - Our total withheld last year was $18,604, but total tax (line 63) was $22,431 since we also had some self-employed income that I did not pay any tax on durng the year, so owed some tax at the end of the year - I cashed in a large amount of US savings bonds this year, with about $60,000 in interest paid to me for them - So, this year my AGI will be over 150K since it includes the 60K of interest, and my tax will be a lot higher than last year since this is an extra 60K that I didnt have last year - If my wife and I keep withholding as it is now, we will not match last years total tax, probably be a few thousand under, about $20,000
So, from what I understand, since i was under 150K last
year, I have to have paid at least my total tax by the end
of this year for me to avoid the penalty, but since I will
not have witheld 22,431 by the end of the year I will owe
- Is this correct? Will I owe a penalty? Did I miss
anything? Do you need more info from me?
- How can I avoid this? Do I have to adjust withholding? or
can I simply send a check to the IRS to make sure I reach
22,431 by the end of the year?
- If I dont do anything, what would my penalty be? How is it
calculated by the IRS?
Thanks in advance for all of your help,
- posted 13 years ago