IRS waives penalties for many taxpayers surprised by underwithholding

The underpayment penalty won't apply if you paid at least 85% of your 2018 tax bill through withholding or estimated tax payments. Normally, 90% must be paid for the waiver.

Many Americans are worried about getting smaller refunds this year, but it could be worse. If the income tax withheld from your paychecks last year was way less than it should have been, or your estimated tax payments for 2018 were far too low, you could be hit with an underpayment penalty in addition to owing the IRS money for taxes due. Ouch!

Fortunately, the IRS is providing some additional penalty relief this year. Typically, you avoid the underpayment penalty if, through withholding or estimated payments, you prepay at least:

90% of your tax bill for the tax year, or

100% of what you owed for the previous tax year (110% if your AGI for the previous year was more than $150,000).

For the 2018 tax year--and only the 2018 tax year--the 90% threshold is reduced to 85%. So, you won't be hit with the underpayment penalty this filing season if your 2018 withholding or estimated taxes equaled at least (1) 85% of your 2018 tax, or (2) 100% of your 2017 tax (110% if your 2017 AGI was more than $150,000).

https://www.msn.com/en-us/money/taxes/irs-waives-penalties-for-many-taxpayers-surprised-by-underwithholding/ar-BBUauu2?li=BBnbfcN