IRS WAIVES MAJOR 2018 PENALTY
IRS waives major 2018 penalty. The Internal Revenue Service announced that it is waiving the estimated tax penalty for many taxpayers whose 2018 federal income tax withholding and estimated IRS tax payments fell short of their total tax liability for the year. 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. The usual percentage threshold is 90 percent to avoid a penalty. IRS waives major 2018 penalty.
The waiver computation announcement will be integrated into commercially available tax software and reflected in the forthcoming revision of form 2210 and instructions. This relief is designed to help taxpayers who were unable to properly adjust their withholding and estimated tax payments to reflect an array of changes under the Tax Cuts and Jobs Act, the far reaching tax reform law enacted in December 2017.
IRS waives major 2018 penalty. “We realize there were many changes that affected people last year, and this penalty waiver will help taxpayers who inadvertently didn’t have enough tax withheld,” said IRS Commissioner Chuck Rettig. “We urge people to check their withholding again this year to make sure they are having the right amount of tax withhold for 2019.” The updated federal tax withholding tables, released in early 2018, largely reflected the lower tax rates and the increased standard deduction brought about by the new rule. This generally meant taxpayers had less tax withhold in 2018 and saw more in their paychecks.
Although most 2018 tax filers will get refunds, some taxpayers will unexpectedly owe additional tax when they file their returns. For waiver purposes only, the penalty waiver lowers the 90 percent threshold to 85 percent. It is meant to help those who did not take into account the new tax law changes or never looked at the new tax withholding tables prior to filing a tax return. For those seeking a Penalty Abatement, contact this quality Tax Resolution Company for tax advice, and ask about whether you qualify for the IRS Fresh Start Program.