[Manuelo]

Ok, I’m going over Becker and they never mention anything about Delinquency penalty – Until you do their questions! So, I want to know what the difference is between an ‘underpayment’ penalty and a ‘delinquency’ penalty.

Here is what I think.

Example of Underpayment penalty: This penalty is based on underpayment of estimated taxes. So, let’s say you underpay one of your estimated quarterly monthly payments by $500 or more, you get charged an ‘underpayment penalty’ on that particular payment from the due date of that payment to the date the payment is made.

Example of Delinquency penalty: This payment is based on ALL your estimated taxes combined together. If the total of estimated taxes you paid is less than 90% of the tax owed on the return by the due date, a delinquency penalty is applied.

Am I right here? Can someone share their views with an example to make it simple? Thanks.