Penalty for Underpayment of Estimated Tax

  • Creator
    Topic
  • #190583
    pia ach
    Member

    How much is the penalty for underpayment?

    Finally done!!! Experience-pending. Ethics- Pending.
    Reg 78 / 73/82.
    Aud 74/89.
    BEC 72 /78.
    FAR 74/ 73/ 82.

Viewing 5 replies - 1 through 5 (of 5 total)
  • Author
    Replies
  • #625334
    OnMyWay732
    Participant

    It's not really a penalty as much as it is interest on the amount due. Not sure of the exact amount though

    AUD - July 2014 - 76
    REG - August 2014 - 82
    FAR - November 2014 - 78
    BEC - January 2015 - 81

    DONE!!!!

    Used Becker online. Who needs a text when you can burn your eyes out staring at the screen for months on end?

    "Let me tell you something you already know. The world ain't all sunshine and rainbows. It is a very mean and nasty place and it will beat you to your knees and keep you there permanently if you let it. You, me, or nobody is gonna hit as hard as life. But it ain't how hard you're hit; it's about how hard you can get hit, and keep moving forward. How much you can take, and keep moving forward. That's how winning is done!"

    #625335
    Anonymous
    Inactive

    1/2 per month? Does that sound right?

    #625336
    pia ach
    Member

    Cannot find anything from the internet, apart from the suggestion that it is a very tricky calculation and let the IRS handle it !

    Finally done!!! Experience-pending. Ethics- Pending.
    Reg 78 / 73/82.
    Aud 74/89.
    BEC 72 /78.
    FAR 74/ 73/ 82.

    #625337
    taxgeek83
    Participant

    https://www.irs.gov/publications/p505/ch04.html

    Looks like it's 3%. In real life, you're right. Let the IRS calculate it – a lot easier than trying to figure it out yourself and then getting into an overage/underage situation.

    #625338
    san4596
    Member

    In real life, you let the software you use calculate the underpayment penalty, and the interest rate changes monthly sometimes.

    If you are overpaid for the year, you can still have penalties & interest due for not paying the correct ES payments. However, you can get out of them if the bulk of income tax due was incurred in later quarters, and you made ES payments according to that income.

    CPA EXAM: DONE!!!!
    Ethics Course: Passed
    Application Mailed: 3/16/15
    Professional Conduct Exam: 97
    Certification Date: 4/2/15!!!

Viewing 5 replies - 1 through 5 (of 5 total)
  • You must be logged in to reply to this topic.