Topic No. 306 Penalty for Underpayment of Estimated Tax. "I saw you (and him) walking in the rain"

The United States income tax system is a pay-as-you-go tax system, which means that you must pay income tax as you earn or receive your income during the year. You can do this either through withholding or by making estimated tax payments. If you didn't pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and refundable credits, or if they paid withholding and estimated tax of at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller. There are special rules for farmers and fishermen, certain household employers and certain higher income taxpayers. For more information, refer to Publication 505, Tax Withholding and Estimated Tax.

Generally, taxpayers should make estimated tax payments in four equal amounts to avoid a penalty. However, if you receive income unevenly during the year, you may be able to vary the amounts of the payments to avoid or lower the penalty by using the annualized installment method. Use Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts (PDF)  To see if you owe a penalty for underpaying your estimated tax.

The law allows the IRS to waive the penalty if:

1.    You didn't make a required payment because of a casualty event, disaster, or other unusual circumstance and it would be inequitable to impose the penalty, or

2.    You retired (after reaching age 62) or became disabled during the tax year or in the preceding tax year for which you should have made estimated payments, and the underpayment was due to reasonable cause and not willful neglect, or

3.    The underpayment was due to an inability to accurately calculate your estimated income tax payment due to the breadth of changes enacted by the tax reform.

Refer to the Form 2210 Instructions (PDF) for information on requesting a waiver of the estimated tax penalty. Please see IR-2019-144 for a waiver of the estimated tax penalty for eligible 2018 tax filers.

Refer to Publication 505 for information about federally declared disaster areas.

Refer to the Form 1040 Instructions (PDF) for where to report the estimated tax penalty on your return.

Tax Representation, Consulting and Tax Planning

(212) 974-3435

Free Consultation: Federal Tax Practitioner, CPCU and Attorney. We provide our Clients with successful Federal and State Tax Representation. Legally privileged consultations are available Tuesday through Friday in our New York City offices. 

Tax Representation: Specializing in unpaid Income, Sales and Payroll taxes. We negotiate excellent Payment Plans, Audits, Offers in Compromise, and all other tax matters. Proven results. Practicing before the Internal Revenue Service and the New York State Department of Taxation and Finance. Speak with us directly (212) 974-3435 or contact us online.

Tax Advisors: Our Consulting and strategic Tax Planning services are designed to help Business Owners protect their assets and significantly reduce their income tax liability in 2020. 

W/C & NYSIF Assessments: We help Construction Companies with Workers Compensation Audits and NYSIF Premium Assessment Disputes, including Employee Misclassification, Unreported Income, Application Fraud, Experience, Rating and all other Workers Comp violations. Call us directly (212) 974-3435 to schedule a Free Consultation.

Expedited Service: Unfiled Tax Returns? We can have your missing Tax Returns prepared and filed within 48 hours, guaranteed. Do you need to establish a new Corporation, LLC or S-Corp? We can help. All States. Contact us directly for immediate assistance. 

(212) 974-3435

Tax Filing Tips from the New York State Tax Department + Free Resources to Promptly Receive Refunds Owed

The New York State Department of Taxation and Finance today encouraged taxpayers to prepare for income tax filing season by reviewing some important tips that can ease the process and ensure accurate returns and promptly issued refunds.

“We are committed to fair and efficient tax administration, which means all returns are analyzed by our advanced processing system to detect errors and fraud,” said Acting Commissioner Nonie Manion. “To ensure your return sails through this process and any refund owed is issued promptly, review these tips and all the resources on our website at www.tax.ny.gov.”

E-file for free. A large percentage of New Yorkers qualify to electronically prepare and file both their federal and state income tax returns for free. Last year, more than 155,000 taxpayers took advantage of the free-filing options available on the Tax Department website, and close to 92% e-filed their returns—speeding refunds.

File early. Don’t put it off until the last minute. Filing in a rush can lead to errors that will delay any refund you may be owed.

Save a tree. E-filing is safer and more efficient than sending paper returns through the mail. Nearly 92% of all New York State personal income tax returns are electronically prepared and filed. All returns, whether filed electronically or on paper, undergo the same systematic review.

File for free. Taxpayers with adjusted gross household incomes of $66,000 or less in 2018 may access free, user-friendly software from their computer, smartphone, or tablet at www.tax.ny.gov (search: Free File). The tax preparation software helps prevent filing errors and processing delays. It may also help you find potentially valuable credits you may have missed.

Access your Account Summary. This page provides a central location for viewing details of your tax account. You can view prepayments to accurately report on your tax return when filing. This includes estimated tax payments made throughout the year as well as payments made with your extension of time to file.

File on time. To avoid penalties and interest, file on time. The penalties are much higher for late filing than for late payment.

Use direct deposit. Receive any refund due up to a week faster by having it directly deposited into your bank account. Be sure to double check the routing and account numbers for your account.

Check your refund online. If you’re eager to find out the status of your claim for an income tax refund, use the Check your Refund  app on our website: www.tax.ny.gov. It’s the fastest and most convenient way to know when to expect your refund. You’ll need to enter the refund amount you're claiming, your Social Security number, and which form you filed.

Unpaid Sales, Income and Payroll Taxes To schedule a free, legally privileged consultation with a Federal Tax Practitioner and Attorney in our conveniently located New York City office call (212) 974-3435 or contact us online. *Same day and emergency appointments are available Monday through Friday. 

✔   We negotiate excellent repayment plans with the IRS and State.

✔   Missing tax returns prepared and filed within 48 hours, guaranteed. 

✔  Civil and criminal tax representation, including audits. 

Merchant Services We settle debts, re-negotiate loans and can provide you with up to $500,000 of secured financing. For a free consultation call (212) 974-3435 or contact us online. *Same day and emergency appointments are available Monday through Friday. 

IRS Unable to Stop Identity Theft - If you’ve been the victim of Identity Theft call SELIG & Associates

Tax Questions? 

Selig & Associates has the Answers

WASHINGTON — Even though reports of tax-related identity theft have declined markedly in recent years, the Internal Revenue Service warns that this practice is still widespread and remains serious enough to earn a spot on the agency’s annual “Dirty Dozen” list of tax scams.

The Dirty Dozen is compiled each year by the IRS and outlines a variety of common scams taxpayers may encounter any time during the year. Many of these cons peak during filing season as people prepare their tax returns or hire tax professionals.

Tax-related identity theft occurs when someone uses a stolen Social Security number or Individual Taxpayer Identification Number (ITIN) to file a fraudulent tax return claiming a refund.

The IRS, the states and the tax industry began working together in 2015 as the Security Summit to fight tax-related identity theft. Security Summit partners enacted a series of safeguards that are making inroads against identity thieves.

For example, the number of taxpayers reporting themselves as identity theft victims declined by 40 percent in 2017 from 2016. In 2017, the IRS received 242,000 reports from taxpayers compared to 401,000 in 2016. This was the second year in a row this number fell, dropping from 677,000 victim reports in 2015. Overall, the number of identity theft victims has fallen nearly 65 percent between 2015 and 2017.

Because of these successes, criminals are devising more creative ways to steal more in-depth personal information to impersonate taxpayers. Taxpayers and tax professionals must remain vigilant to the various scams and schemes used for data thefts.

Business filers should be aware that cybercriminals also file fraudulent Forms 1120 using stolen business identities and they, too, should be alert.

 

Security Reminders for Taxpayers

The IRS and its partners remind taxpayers and tax professionals that they can do their part to help in this effort. Taxpayers and tax professionals should:

• Always use security software with firewall and anti-virus protections. Make sure the security software is always turned on and can automatically update. Encrypt sensitive files such as tax records stored on the computer. Use strong passwords.
• Learn to recognize and avoid phishing emails, threatening phone calls and texts from thieves posing as legitimate organizations such as banks, credit card companies and government organizations, including the IRS. Do not click on links or download attachments from unknown or suspicious emails.
• Protect personal data. Don’t routinely carry a Social Security card, and make sure tax records are secure. Treat personal information like cash; don’t leave it lying around.

The Security Summit has worked to increase awareness among taxpayers and tax professionals about tax-related identity theft and security steps through its “Taxes. Security. Together.” and “Protect Your Clients; Protect Yourself” campaigns.

The IRS understands that reversing the damage caused by identity theft is a frustrating and complex process for victims. While identity thieves steal information from sources outside the tax system, the IRS is often the first to inform a victim that identity theft has occurred. The IRS is working hard to resolve identity theft cases as quickly as possible. For more information, see the special identity theft section on IRS.gov.

Related Items:

• Identity Theft Guide for Business Partnerships, Estates and Trusts
• IRS Security Awareness Tax Tips
• Key IRS Identity Theft Indicators Continue Dramatic Decline in 2017

Are you in Trouble with the IRS?

Successful Civil and Criminal Tax Representation Selig & Associates practices before the Internal Revenue Service (“IRS”) the New York State Department of Taxation and Finance (“NYSDTF”) the Department of Justice Tax Division (“DOJ”) and the Defense Office of Hearings and Appeals (“DOHA”). *To schedule a FREE legally privileged consultation with a licensed Federal Tax Practitioner and Attorney call Selig & Associates directly (212) 974-3435

Proven Results Selig & Associates successfully resolves IRS & NYS tax problems including: Tax Crimes; Tax Evasion; Failure to File a Tax Return and Criminal Non-Filing; Filing False Tax Returns; Installment Agreements; Partial Payment Agreements; IRS Audits; Sales Tax Audits; Sales Tax Controversies; Wage Garnishments; Bank Levies; Seizure of Real Property; Innocent Spouse Relief; Trust Fund Recovery Penalty; Payroll Taxes; Workers Compensation Insurance Audits ("Workers Comp"); Statute of Limitations; Offer in Compromise ("OIC"); Administrative Appeals; Collection Due Process Hearings ("CDP") and most other tax matters. *To schedule a FREE legally privileged consultation with a licensed Federal Tax Practitioner and Attorney call Selig & Associates directly (212) 974-3435

MK ULTRA, TAX CRIMES and the ILLUMINATI. Selig & Associates WPIX 11

Tax Representation Our tax practice is limited to representation before the Internal Revenue Service the New York State Department of Taxation and Finance and the Department of Justice Tax Division. We successfully resolve all civil and criminal tax issues. We solve income, sales and payroll withholding tax problems. We can prepare and file your missing tax returns in as little as 24 hours. We provide tax and legal representation at IRS audits, criminal examinations and appeal hearings. Release of wage garnishment and bank levy, monthly payment plans, and offers in compromise. For a free and legally privileged consultation call Selig & Associates directly (212) 974-3435 For additional information see Practice Areas

Risk Management Could a sexual harassment claim ruin your business? In today’s litigious environment you need to protect yourself against sexual harassment and hostile work environment claims. We provide legal, insurance and other asset protection strategies for business-owners and medical service providers. By implementing an effective sexual harassment strategy today, you can protect your reputation, your business, and your assets tomorrow. We solve problems before they happen. To schedule a consultation or a comprehensive evaluation of your existing plan call Selig & Associates directly (212) 974-3435 *Our fees are Tax Deductible (IRC §162)

New York City Special Education Advocacy Children with Disabilities need an experienced Advocate and Attorney to protect their rights. Did you know that Children with Special Needs are entitled to a “free and appropriate” education? Did you know that it is illegal for New York City Public Schools to discriminate against children with disabilities?  For a free consultation or a comprehensive evaluation of your child’s case, call Selig & Associates directly (212) 974-3435 *Individuals with Disabilities Education Act of 2004, Section 504 of the Rehabilitation Act of 1973

Professional Service David Selig and Bradley Dorin, Esq., meet with each and every client personally. We return telephone calls, answer emails and provide our clients with regular updates and status reports. For additional information see About Us

Property Damage David Selig PA, settles large dollar residential and commercial property insurance claims, including business interruption insurance, burglary, fire, windstorm, and losses caused by water damage. For a free consultation call Selig directly (212) 974-3435

How to Protect Yourself & Your Company Against Sexual Harassment & Hostile Work Environment Claims

We provide legal, insurance and other asset protection strategies for business-owners and medical service providers. By implementing an effective sexual harassment strategy today, you can protect your reputation, your business, and your assets tomorrow. We solve problems before they happen. To schedule a consultation or a comprehensive evaluation of your existing plan call Selig & Associates directly (212) 974-3435 *_{Our fees are Tax Deductible (IRC §162)}

Laws Enforced by EEOC

Title VII of the Civil Rights Act of 1964 (Title VII)
This law makes it illegal to discriminate against someone on the basis of race, color, religion, national origin, or sex. The law also makes it illegal to retaliate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit. The law also requires that employers reasonably accommodate applicants' and employees' sincerely held religious practices, unless doing so would impose an undue hardship on the operation of the employer's business.

·       The Pregnancy Discrimination Act
This law amended Title VII to make it illegal to discriminate against a woman because of pregnancy, childbirth, or a medical condition related to pregnancy or childbirth. The law also makes it illegal to retaliate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.

The Equal Pay Act of 1963 (EPA)
This law makes it illegal to pay different wages to men and women if they perform equal work in the same workplace. The law also makes it illegal to retaliate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.

The Age Discrimination in Employment Act of 1967 (ADEA)
This law protects people who are 40 or older from discrimination because of age. The law also makes it illegal to retaliate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.

Title I of the Americans with Disabilities Act of 1990 (ADA)
This law makes it illegal to discriminate against a qualified person with a disability in the private sector and in state and local governments. The law also makes it illegal to retaliate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit. The law also requires that employers reasonably accommodate the known physical or mental limitations of an otherwise qualified individual with a disability who is an applicant or employee, unless doing so would impose an undue hardship on the operation of the employer's business.

Sections 102 and 103 of the Civil Rights Act of 1991
Among other things, this law amends Title VII and the ADA to permit jury trials and compensatory and punitive damage awards in intentional discrimination cases.

Sections 501 and 505 of the Rehabilitation Act of 1973
This law makes it illegal to discriminate against a qualified person with a disability in the federal government. The law also makes it illegal to retaliate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit. The law also requires that employers reasonably accommodate the known physical or mental limitations of an otherwise qualified individual with a disability who is an applicant or employee, unless doing so would impose an undue hardship on the operation of the employer's business.

The Genetic Information Nondiscrimination Act of 2008 (GINA)