Hi all,
I have question regarding how to calculate tax underpayment. For example:
Individual current year tax underpayment part subject to penalty. Different scenarios were given.
Known factors: Current year withholding, PY tax liability, CY tax liability, Individual annual taxable income.
Question: how much will be subjected to penalty ?
so I should compare current year withholding to the lower of 90% PY tax or 100% of CY tax rule ?
If current year withholding is lower than the lower to PY or CY? There should be penalty.
Besides, the balance due should be over &1,000. It means there is 1,000 deductible.
Am I right above ?