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taxes with penThe Internal Revenue Service is waiving the penalty for many taxpayers whose withholding and estimated tax payments fell short of what they owed for 2018. The IRS said there is no penalty for those who paid at least 85 percent of their tax liability for the year, down from the previous 90 percent threshold.

The computation will be integrated into commercial tax software and reflected in the forthcoming revision of Form 2210 and instructions. Details are available through  Notice 2019-11, posted on IRS.gov.

The IRS said the action is designed to help taxpayers who were unable to adjust withholding and estimated payments because of the changes under the Tax Cuts and Jobs Act .

Withholding tables last year could not fully factor in some changes, such as the suspension of dependency exemptions and reduced itemized deductions. That meant taxpayers could have paid too little tax for 2018 if they did not revise their W-4 forms or increase estimated tax payments.

Last modified on Wednesday, 16 January 2019
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