IRS provides waiver for 2018 estimated tax shortfalls - Spidell

IRS provides waiver for 2018 estimated tax shortfalls

The IRS will waive underpayment of estimated tax penalties for the 2018 tax year if a taxpayer’s total withholding and estimated tax payments are at least 85% of the tax shown on the return for the 2018 taxable year. (IR-2019-03) Normally, a taxpayer must pay at least 90% of the current year’s tax to avoid a penalty. The waiver is being implemented because many taxpayers were unable to accurately predict their 2018 tax liability as a result of the numerous changes enacted by the Tax Cuts and Jobs Act.

Note: The estimated tax underpayment waiver for taxpayers who pay at least 100% of their prior-year liability (110% for taxpayers with AGIs exceeding $150,000 or $75,000 for MFS) still applies as well.
According to the IRS, the waiver computation will be integrated into commercially available tax software and reflected in the forthcoming revision of Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts, and its instructions.

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