Good news for taxpayers who make estimated tax payments! The IRS is automatically waiving the estimated tax penalty for more than 400,000 eligible taxpayers! The IRS will waive the penalty for eligible taxpayers who filed their 2018 federal income tax returns but did not claim the waiver. The IRS will apply the waiver to taxpayers’ accounts, so there is no need for taxpayers to contact the IRS to apply or request the waiver.
The move comes after the IRS lowered the usual 90% penalty threshold to 80% to help taxpayers whose withholdings and estimated tax payment fell short of their total 2018 tax liability. The IRS also removed the requirements that the estimated tax payments be made in four equal installments, as long as the taxes were paid by January 15th, 2019. The IRS will mail copies of Notices CP 21 that will grant this relief to affected taxpayers. If you have already paid the penalty, you will also receive a refund check about three weeks after you receive your CP21 notice. This will happen regardless of if you requested penalty relief. If you have already filed your 2018 tax return, you do not need to take any action. The IRS will automatically grant you the relief.
If you haven’t filed your 2018 federal tax return, you will need to claim the waiver on your return. This includes those who are filed for an extension and must file by October 15th. If you file your tax return online, you can take advantage of the waiver computation that is already built into the tax software package. If you file your return on paper, you can fill out Form 2210 and attach it to your 2018 return.
Due to the changes created by the Tax Cuts and Jobs Act of 2017, the IRS urged taxpayers to do a paycheck checkup to see if their withholding for 2019 would be correct. With many taxpayers switching from itemizing to the standard deduction and other tax changes, many who owed in the past may have ended up owing more when they filed their tax return.
If you need help filing your 2018 tax return by the October 15th deadline, Polston Tax can help. Our firm of tax accountants, tax attorneys, and tax preparers can help you file your tax return accurately and on time and help you deal with any taxes you may owe the IRS or State. Schedule your free consultation by calling 844-841-9857 or click below to schedule your free consultation.