Fail to meet estimated 2018 tax payment? IRS may waive fees.

The Tax Cuts and Jobs Act (TCJA) meant big tax changes for 2018 tax filings. For some, the changes impacted tax withholdings. As a result, the Internal Revenue Service (IRS) encouraged taxpayers to conduct a paycheck checkup to make sure they were withholding enough funds to cover their tax obligations. Those who failed to cover at least 90% of their tax bill through withholdings found themselves facing the potential for big financial penalties.

Why the penalties?

The United State tax system is a pay as you go system. The government expects taxpayers to pay their taxes throughout the year, not just in one lump sum at the end of the year. Since the tax obligation can vary a bit year to year, the agency generally allows taxpayers to be off by approximately 10% without any fees. Any variance that is greater than 10% can result in a fine and other tax compliance issues.

The TCJA left some taxpayers with withholdings that did not properly match their tax obligations. Those who failed to make changes found themselves facing a tax bill that was greater than 10% of the tax obligation for the year. As a result, the taxpayers could be subject to fines.

The IRS recently announced that it will automatically waive the estimated tax penalty for many taxpayers who filed 2018 tax returns without claiming the waiver. The announcement could translate to big savings for taxpayers.

Who qualifies for the waiver?

The IRS announced it would lower the threshold from 90% to 80%. The agency states the change will impact over 400,000. The IRS further states it will review all tax filings and will automatically apply the waiver without any action required by the taxpayer.

No Comments

Leave a comment
Comment Information
Email Our Team

Contact Us to Get Started Today

Located in the Washington, D.C area, we serve clients in the District of Columbia, Maryland and Northern Virginia, as well as across the country and overseas. For a free initial consultation, call 202-381-1261 or complete our brief online form.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Six Convenient Office Locations in and around the DC Metropolitan Area

Washington, D.C.
1050 Connecticut Ave NW #500
Washington, D.C. 20036

Phone: 202-618-1873
Fax: 888-235-8405
Washington Law Office Map

Columbia Office
10440 Little Patuxent Parkway, Suite 300
Columbia, MD 21044

Phone: 410-497-5947
Fax: 888-235-8405
Columbia Law Office Map

Annapolis Office
839 Bestgate Road
Suite 400
Annapolis, MD 21401

Phone: 410-497-5947
Fax: 888-235-8405
Annapolis Law Office Map

Fairfax Office
8280 Willow Oaks Corporate Drive
Suite 600
Fairfax, VA 22031

Phone: 703-621-7169
Fax: 888-235-8405
Fairfax Law Office Map

Rockville Office
199 E. Montgomery Avenue
Suite 100
Rockville, MD 20850

Phone: 240-599-5009
Fax: 888-235-8405
Rockville Law Office Map

Baltimore Office
400 East Pratt Street
8th Floor
Baltimore, MD 21202

Phone: 443-743-3381
Fax: 888-235-8405
Baltimore Law Office Map