IRS notice 3/22/2019: for 2018 taxes, no penalty if 80% of tax shown on return was withheld or est taxes paid

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mariezzz
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IRS notice 3/22/2019: for 2018 taxes, no penalty if 80% of tax shown on return was withheld or est taxes paid

Post by mariezzz » Sat Mar 23, 2019 12:09 pm

https://www.irs.gov/newsroom/irs-expand ... 80-percent
IRS expands penalty waiver for those whose tax withholding and estimated tax payments fell short in 2018; key threshold lowered to 80 percent

The IRS is lowering to 80 percent the threshold required to qualify for this relief. Under the relief originally announced Jan. 16, the threshold was 85 percent. The usual percentage threshold is 90 percent to avoid a penalty.
...
This means that the IRS is now waiving the estimated tax penalty for any taxpayer who paid at least 80 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two.

Today’s revised waiver computation will be integrated into commercially-available tax software and reflected in the forthcoming revision of the instructions for Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts.

Taxpayers who have already filed for tax year 2018 but qualify for this expanded relief may claim a refund by filing Form 843, Claim for Refund and Request for Abatement and include the statement “80% Waiver of estimated tax penalty” on Line 7. This form cannot be filed electronically.

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wjo
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Re: IRS notice 3/22/2019: for 2018 taxes, no penalty if 80% of tax shown on return was withheld or est taxes paid

Post by wjo » Sat Mar 23, 2019 12:37 pm

A reminder that the safe harbor rule is still in effect and that if you paid 100% of last year's liability, you are ok. My taxes went up this year due to the SALT limitations, but I still paid more than 100% of last year's liability.

FactualFran
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Re: IRS notice 3/22/2019: for 2018 taxes, no penalty if 80% of tax shown on return was withheld or est taxes paid

Post by FactualFran » Sat Mar 23, 2019 12:47 pm

I wonder what percentage of the tax returns that the IRS has processed so far have been in the 80% to 85% range versus the 85% to 90% range.

gokartmozart
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Re: IRS notice 3/22/2019: for 2018 taxes, no penalty if 80% of tax shown on return was withheld or est taxes paid

Post by gokartmozart » Sat Mar 23, 2019 2:19 pm

Thank you! I paid 83% which means I meet this new 80% threshold but did not meet the previous 85% one. Since I filed a couple of weeks ago, I will now file Form 843 to get the refund.

Another official IRS description, besides the press release linked in the OP, is Notice 2019-25.

Bacchus01
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Re: IRS notice 3/22/2019: for 2018 taxes, no penalty if 80% of tax shown on return was withheld or est taxes paid

Post by Bacchus01 » Sat Mar 23, 2019 9:43 pm

wjo wrote:
Sat Mar 23, 2019 12:37 pm
A reminder that the safe harbor rule is still in effect and that if you paid 100% of last year's liability, you are ok. My taxes went up this year due to the SALT limitations, but I still paid more than 100% of last year's liability.
Or 110% based on income

Thesaints
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Re: IRS notice 3/22/2019: for 2018 taxes, no penalty if 80% of tax shown on return was withheld or est taxes paid

Post by Thesaints » Sat Mar 23, 2019 9:47 pm

They should have given some sort of reward to those who were instead not caught by surprise and diligently made their estimated payments.
Feels like the new homeowner assistance program all over again...

nick evets
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Re: IRS notice 3/22/2019: for 2018 taxes, no penalty if 80% of tax shown on return was withheld or est taxes paid

Post by nick evets » Sun Mar 24, 2019 7:26 am

Thesaints wrote:
Sat Mar 23, 2019 9:47 pm
They should have given some sort of reward to those who were instead not caught by surprise and diligently made their estimated payments.
Feels like the new homeowner assistance program all over again...
What reward would you like? I confess I didn't remember or participate in what the IRS says was a heavily advertised "Paycheck Checkup" campaign, and was unpleasantly surprised when we filed taxes this year to write a check for $4k.

Last week we ran the W-4 calculator and: married claiming 0 allowances, we still need to have almost $600 a *month* additionally withheld from our paychecks to break even for 2019. That seems a major miscalculation on the part of the IRS, to me.

nolesrule
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Re: IRS notice 3/22/2019: for 2018 taxes, no penalty if 80% of tax shown on return was withheld or est taxes paid

Post by nolesrule » Sun Mar 24, 2019 7:56 am

nick evets wrote:
Sun Mar 24, 2019 7:26 am
Thesaints wrote:
Sat Mar 23, 2019 9:47 pm
They should have given some sort of reward to those who were instead not caught by surprise and diligently made their estimated payments.
Feels like the new homeowner assistance program all over again...
What reward would you like? I confess I didn't remember or participate in what the IRS says was a heavily advertised "Paycheck Checkup" campaign, and was unpleasantly surprised when we filed taxes this year to write a check for $4k.

Last week we ran the W-4 calculator and: married claiming 0 allowances, we still need to have almost $600 a *month* additionally withheld from our paychecks to break even for 2019. That seems a major miscalculation on the part of the IRS, to me.
Married 0 has never worked well for 2 earner households, but it's even more off under the new withholding tables. In 2017 we were witholding an extra $2500/year. In 2018, that amount doubled.

nick evets
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Re: IRS notice 3/22/2019: for 2018 taxes, no penalty if 80% of tax shown on return was withheld or est taxes paid

Post by nick evets » Sun Mar 24, 2019 8:09 am

nolesrule wrote:
Sun Mar 24, 2019 7:56 am
Married 0 has never worked well for 2 earner households, but it's even more off under the new withholding tables. In 2017 we were witholding an extra $2500/year. In 2018, that amount doubled.
Yes, that sounds about right for us as well. Actually prior to this year, I was claiming "S" with 2 allowances and my wife claiming "M" with 0. That just always sort of worked out, especially as we usually have $35k in itemized deductions (property tax and mortgage interest).

andypanda
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Re: IRS notice 3/22/2019: for 2018 taxes, no penalty if 80% of tax shown on return was withheld or est taxes paid

Post by andypanda » Sun Mar 24, 2019 8:37 am

"They should have given some sort of reward to those who were instead not caught by surprise and diligently made their estimated payments."

Thanks, I needed my good laugh for the day. Next you'll want to be thanked for working hard and paying taxes and supporting the government. :sharebeer

sa5
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Re: IRS notice 3/22/2019: for 2018 taxes, no penalty if 80% of tax shown on return was withheld or est taxes paid

Post by sa5 » Wed Apr 03, 2019 4:26 pm

I already filed my 2018 taxes and did not include a Form 2210. I was assessed a failure to pay proper estimated tax penalty by the IRS, but am between 80% and 85%. I plan to file a Form 843. Do I also need to include a Form 2210 with my Form 843? Also, am I expected to pay the bill I was sent, then receive a refund after my Form 843 is processed?

shelanman
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Re: IRS notice 3/22/2019: for 2018 taxes, no penalty if 80% of tax shown on return was withheld or est taxes paid

Post by shelanman » Thu Apr 04, 2019 1:17 am

Don't you just know it...

...I reran my numbers yesterday, but I was at 79.68%, so, in the words of the great Willy Wonka, I get Nothing! I Lose!

Leesbro63
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Re: IRS notice 3/22/2019: for 2018 taxes, no penalty if 80% of tax shown on return was withheld or est taxes paid

Post by Leesbro63 » Thu Apr 04, 2019 5:47 am

How can the IRS change this when it wants to? Isn’t the withholding threshold and penalty part of the tax code that Congress and the President have to approve to change?

sa5
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Re: IRS notice 3/22/2019: for 2018 taxes, no penalty if 80% of tax shown on return was withheld or est taxes paid

Post by sa5 » Mon Jun 10, 2019 6:05 pm

sa5 wrote:
Wed Apr 03, 2019 4:26 pm
I already filed my 2018 taxes and did not include a Form 2210. I was assessed a failure to pay proper estimated tax penalty by the IRS, but am between 80% and 85%. I plan to file a Form 843. Do I also need to include a Form 2210 with my Form 843? Also, am I expected to pay the bill I was sent, then receive a refund after my Form 843 is processed?
To answer my own question, I paid the penalty, then filed only a Form 843 back in April, and today received a check refunding me the original penalty I paid plus interest.

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