The IRS is increasing the interest penalty for underpaid taxes to 8% from 3% two years ago, impacting self-employed workers and independent contractors.
Taxpayers can avoid the penalty if the balance due is under $1,000 and are required to make estimated tax payments at least once each quarter if they don’t have at least 90% of their taxes withheld.
Most W-2 employees won’t be affected. (Trending: Tucker Reveals The Moment He Became A Full-Blown Trump Supporter)
Joseph Doerrer, a CPA and financial planner said, “It’s a cautionary tale for individuals to think about as we get toward year-end.”
“Are you where you should be?”, asked Doerrer.
Sameet Durg, a marketing executive said, “Now I pay attention to taxes all year around,” after racking up a yearly tax bill in the thousands.
“I don’t want the giant hit in April,” declared Durg.
Taxpayers can use the IRS tax-withholding estimator tool to avoid underpayment penalties.
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