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What is the underpayment penalty, and how do I avoid it?
Contributed by: ChristopherT, FreeTaxUSA Agent, Tax Pro One of the worst feelings when tax day arrives, is discovering you not only owe tax but also a penalty for underpayment of taxes. When you’re charged an underpayment penalty, you’ll owe additional money on top of the tax you already need to pay. Below we’ll cover the…
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What is the Underpayment Tax Penalty?
Contributed by: MatthewD, FreeTaxUSA Agent, TaxPro More and more people are getting caught by the underpayment tax penalty. Why? Particularly when you pay your taxes due by the filing deadline, generally April 15 of each year. First, keep in mind the IRS requires you to "pay as you go." In other words, when you earn…
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What do I do if I can’t pay my tax bill to the IRS?
If you have a balance due and can’t pay the IRS in full by the April 15th due date, don’t panic. The IRS has many payment options available to help you take care of the tax that is due as quickly as possible. Ideally, you’ll be able to pay as much of your taxes as possible by the due date using any of these options: Direct…
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Do I need to pay estimated taxes and if so, when, how, and how much?
It is easier to pay your income taxes if you pay as you earn your income. This is why federal income tax has become a "pay as you go" tax system. If you do not pay enough tax on the income you received during the year, you may owe estimated tax penalties. You should consider making estimated tax payments during the year if…
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Why do I owe taxes?
We all love getting a tax refund. Perhaps you have been getting a refund from the IRS for the past several years and you're anticipating one this year. But then you get to the Federal Tax Summary page and instead of a green refund number showing at the top of the screen, you see that red tax due. Or maybe you were…