2

In 2015, for the first time, most of my income was untaxed, so I paid all my taxes for the year when I filed.

In 2016, I have been and will continue to be employed full-time with taxes already withheld.

The IRS and state & city tax agencies told me I'll owe quarterly payments this year since most of my income was not subject to withholding last year.

I believe I am not obligated to make these payments after all, since all my taxes are already withheld by my employer.

What if anything do I need to do to update the IRS and state & city agencies on my situation to avoid penalties or interest?

5

I was in a similar situation for 2014->2015. In 2014 we owed a lot of money due to some bad math by myself, and a lot of extra income. The accountant (now fired) gave me quarterly tax chits that were based upon my 2014 income with no regard to the makeup of my 2015 income.

We did not use any of those chits. At the end of 2015 we were due a small refund. There was no penalty and I believe there would not have been unless I owed more than $1000.

From the IRS page on the subject.

Underpayment of Estimated Tax If you did not 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 owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid 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. Please refer to Publication 505, Tax Withholding and Estimated Tax, for additional information.

0

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy