The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: penalty calc.||Date: 4/1/2002 2:20 PM|
|Author: vkg||Number: 59958 of 121585|
The underpayment penalty is daily interest on the amount that is determined to be subject to underwitholding penalty. The form to calcuate the penalty is complicated and the amount changes daily. If you are subject to underwithholding penalty I would let the IRS caluate the amount. At 9% interest the penalty will not be extremely large.
It is possible that you are not subject to the underwithholding penality. No withholding penalty is due if you meet either of the safe harbor rules
1) Line 70 is more than $1,000 but is it more than 10% of your taxes?
2) For income less than $150,000 did you withhold as much as your total total taxes for 2000 or if income is over $150,000 110% of last years taxes.
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