The Internal Revenue Service today provided additional expanded penalty relief to taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year.
The IRS is lowering to 80 percent the threshold required to qualify for this relief. Under the relief originally announced Jan. 16, the threshold was 85 percent. The usual percentage threshold is 90 percent to avoid a penalty.
This means that the IRS is now waiving the estimated tax penalty for any taxpayer who paid at least 80 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two.
Taxpayers who have already filed for tax year 2018 but qualify for this expanded relief may claim a refund by filing Form 843, Claim for Refund and Request for Abatement and include the statement “80% Waiver of estimated tax penalty” on Line 7. This form cannot be filed electronically.
Today’s expanded relief will help many taxpayers who owe tax when they file, including taxpayers who did not properly adjust their withholding and estimated tax payments to reflect an array of changes under the Tax Cuts and Jobs Act (TCJA), the far-reaching tax reform law enacted in December 2017.
You can read the full IRS news release here. With questions relating to the 2018 tax year, contact our experts today![button_1 text=”Contact%20Christianson%20Today!” text_size=”15″ text_color=”#ffffff” text_font=”Lato;google” text_letter_spacing=”1″ subtext_panel=”N” text_shadow_panel=”N” styling_width=”30″ styling_height=”20″ styling_border_color=”#ffffff” styling_border_size=”5″ styling_border_radius=”23″ styling_border_opacity=”100″ styling_gradient_start_color=”#1b335d” styling_gradient_end_color=”#1b335d” drop_shadow_panel=”N” inset_shadow_panel=”N” align=”center” href=”https://www.christiansoncpa.com/contact-us/”/]