We didn't have enough taxes withheld as we claimed out son as dependent.

However son has worked and made too much money (at least I think). So we will not be able to claim him as dependent.

Is there anything we can do now?

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    Hi! Maybe it would be helpfull if you add your country as a tag. I suspect the united states? – Swizzler Mar 26 '17 at 21:16
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    Assuming you are in the US (as @Swizzler said, country tag would be useful) then as long as it is the FIRST time you have "underpaid" then the penalty is waived and you can adjust your W4 to correctly update your exemptions and claims to ensure it doesn't happen again. But if it happens more than once, then you will face a penalty on the amount you underpaid and it will often end up being a lot more than what would have been initially had you paid it, so definitely take some time to fix it ASAP. – GµårÐïåñ Mar 26 '17 at 21:23
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    Yes, deposit $4000 into a triditional IRA, specifying 2016 as the tax year for deposit. – JTP - Apologise to Monica Mar 27 '17 at 1:02
  • First, The IRS has several safe harbor provisions. You won't be subject to late fees if you met any of them. Second, earnings alone do not prevent someone from being declared a dependent. Please provide more information to us (child's age, income, type/source of income, living arrangements, country of residence) or go ask an accountant. – Glen Pierce Jul 15 '17 at 14:34

If you withheld taxes based on what you paid last year then you likely will not owe any underpayment penalties, just the extra tax. And this is most likely your situation. The IRS has a couple of different safe harbor provisions and for most tax papers withholding what your tax due was last year puts you into that safe harbor.

Now for this year, you will need to adjust your withholding as your safe harbor withholding amount is going to be higher - since you owe more taxes for last year.

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You'll have to pay it. Gimmicks you can try are filing for an extension, letting you extend and pretend that you will have enough money to pay the government by then (October in the US). If you extend and pretend long enough maybe by 2018 tax time you'll have set yourself up for a tax refund from some other source and you won't be negative anymore, since you can file that year's taxes at the end of January 2018 in the US, giving you only a few months of financial distress in between time.

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