Penalty on underpayment?

Lets take a worst case scenerio. I have ordinary income on January 1st that would result in a $100,000 tax bill, before penalties. I pay no estimated taxes and have no withholding. What will my penalty be? Approximately; I mean, $500, $5,000, $50,000? (If you know the penalty for NYS also that would be great.)

Reply to
Taxlover
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$4,551.30 using 2007 rates (8% all year).. So far in 2008 the penlty would be$3,982.39 at 7%. This assumes your tax liabiity for last year was at least as much and you didn't pay your 2008 taxes until April 5,

2009. Sorry ot enough information to do NY.

ed

Reply to
ed

Well, that's not so bad, thanks. Heck, if you figure the market is going to recover this year then I am better off paying the penalty and holding onto the money. (but on the other hand, I could lose money in the market AND pay the penalty...)

Yes, assume my 2007 income was much larger so there is no safe harbor.

Reply to
Taxlover

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