IRS Has Good News for Taxpayers Who Under-Withheld
The Internal Revenue Service warned taxpayers to check their income tax withholding for almost all of 2018 due to how the Tax Cuts and Jobs Act affected tax brackets. The IRS announced it would waive the penalty for not paying enough estimated tax if affected taxpayers met most of their tax liability in 2018. According to the IRS Newswire, “the IRS is generally waiving the penalty for any taxpayer who paid at least 85 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments, or a combination of the two.” Those who didn’t meet this updated threshold will have to pay the usual withholding penalties. The agency still believes the majority of taxpayers will receive a refund after filing their return. While this change will help those who didn’t send the IRS enough money throughout the year in 2018, the IRS Commissioner reminded taxpayers they will also need to take a close look at their withholding and estimated payments this year to avoid a surprise tax bill in 2020.
If you under-withheld your taxpayer withholding requirements you may not be penalized. Still not sure what this means for your bottom line? Call us today so we can help with taxpayer withholding and other TCJA changes that might affect you. 256.489.1478 or schedule an appointment now.