If you expect to earn about the same amount as last year, you can take the amount of tax paid on your 2021 return and divide it by four to figure out your payment for each quarter.Form 2210 instructions can be found on the IRS website, along with other information about paying estimated taxes, including the IRS 2022 estimated tax dates.īest ways to avoid the IRS underpayment penalty You'll need to complete and include it with your tax return at the end of the year. This form is essentially a simple worksheet that helps you calculate the IRS penalty amount by hand. Two ways to know if you have paid enough in estimated taxes are if you have paid at least 90% of the tax you will end up owing by the end of the current year, or you have paid 100% of the tax shown on last year's annual tax return. This doesn't apply to you if you owe less than $1,000 in tax after withholdings and credits. There’s a thought looming in every taxpayer’s mind: what is the penalty for underpayment of estimated tax? Well, the IRS can slap you with an underpayment penalty if you pay on time, but you fail to make the full estimated tax payments.
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