1. IRS penalizes more taxpayers for underpayment of estimated taxes | Accounting Today

    The Internal Revenue Service has seen a surge in recent years of taxpayers underpaying their estimated taxes and paying the penalty for it. The number of taxpayers who were penalized increased nearly 40 percent from 7.2 million to 10 million filers between 2010 and 2015, according to IRS data analyzed by The Wall Street Journal, or nearly 33 percent from almost 7.5 million to nearly 10 million filers between fiscal years 2007 and 2016, according to a similar analysis by USA Today.

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    1. If you're looking at notices issued in FY 2016, which are primarily 2015 returns, you see roughly about 10 million notices, and total assessments of about $1.3 billion.
    2. The summer of most years is prime time for our notice project on assessing estimated tax penalties.
    3. For starters, the annualized income method is the one that will help a person if they received all of their income during the last part of the year and made a fourth quarter payment to cover it.
    4. If perhaps you receive income unevenly throughout the year, and if you receive a substantial portion of it late in the year, there are waiver options for those who are in casualty and death situations, or if they recently retired or became disabled and are now getting a surprise this year.
    5. For many people that can help resolve the issue.
    6. They are in a situation where they have to think about how they're doing this as a side business.
    7. In either case, you can typically increase your withholding by claiming fewer allowances on your withholding form.