Underpayment Puns

I have a W-2 job and a side business that I run as a sole proprietorship. I pay quarterly estimated taxes, and since my side-hustle income is extremely variable, I just targeted the Safe Harbor amount based on my last years tax liability to be safe with the quarterly tax payments.

I made timely payments for Q1, Q2, and Q3, but it was only before my last payment that I realized I was in the 110% Safe Harbor bucket (vice 100%) due to my income. Therefore my Q4 quarterly estimated payment was quite a bit bigger to hit the 110% (almost double).

So when everything was input, I owe a measly $700, BUT TT is saying I owe a $22 underpayment penalty. To me $700 is a very small amount owed, and I was very diligent about my quarterly payments, so I was surprised by a penalty. TT guides me through the 2210 tax form. I haven't submitted my refund to get the final form, but it appears that they didn't list my quarterly estimated payments as contributing towards my total taxes paid (for the purposes of 2210 underpayment only).

Question: Do you think the $22 penalty is the result of my 4Q quarterly payment being much larger to hit 110% safe harbor, or some glitch in TT where the 2210 isn't reflecting my quarterly payments?

I am not the person who is being underpaid, it's my mum. I know this sounds ridiculous for a son to speak out for his mother in a public forum, but my mum doesn't speak English, nor is she aware of being exploited currently. Some context here, my mum has PR, works part-time in a restaurant, not a trainee or apprentice. She has Restaurant Industry Award and is meant to be paid 22.77 as a minimum wage according to FWO wage calculator. However, she receives only 18 per hour, though according to her she is also paid in a hour lunch break. There is no penalty rate for weekends, or public holidays, and I have recently found out that her employer gave her the falsified pay slips which show the wrong working hour but ironically the correct wage- 25/hr, 31/hr for weekends and 50/hr for public holidays. According to her, the earnings listed from the pay slip goes into the bank account and the rest (whatever is left from the wage 18/hr) goes in cash. She works as a kitchen assistant, and she has been working 5 days a week (about 8 to 12 hours depending on the shift) since lockdown and full week this week (she is only part-time). The superannuation is being paid, but I am not sure whether is being paid correctly. I am under 18, still a student with no part-time job. My mum has worked there for a year, though there were lockdowns. The above information is all that I am aware of, and should be fairly accurate as I have looked through the contract, pay slips and heard everything from my mum. I am only asking how serious is this matter(as a student, I am lacking real experience, everything I know is from research), as I am not intending to report this to FWO on behalf of my mum. Thanks in advance.

Hi All,

I have worked for NSW Healthcare for the past 2 years when I lost my job when covid started. Initially, I was casual, and eventually, I was given permanent part-time. A few months ago, I found a job full-time job in my field. I enjoyed working in hospitals so I did not want to quit. I requested my manager if I can reduce my work hours and keep me as permanent part-time (20 hours a week is required and guaranteed) to which he agreed. My manager quit and my supervisor took over as the manager.

My payslips still state that I’m a part-time employee but I barely get any hours anymore. When I asked my manager about this, he told me he has turned my role into casual. Since then, I worked a few shifts but I never received any additional casual loading (casual loading is 25% more). I barely get any shifts, just 1 shift in the last 2 months. Even when I gave them my full availability (Monday to Sunday during my 3 week holiday), I never got any shifts. When I tried to ask my manager about this, he just told me I’m a casual employee and I should not expect anything. I then asked him why I never received any casual loading for the last few months. He never responded. I tried to contact him several times but no response. If I am still a part-time employee, I am entitled to at least 20 hours of work every week. If I am a casual employee, I should at least get the additional money.

Can anyone tell me whats going on here, so I received an amended tax credit for 2022 and it says I have an underpayment on my paye. When I check on my account on ros, it says my employment was ceased on 31-12-21, and started again on the 10-01-22. I never left the job, I'm still working there. Has someone in my job or revenue made a mistake and Is this where the underpayment is coming from? So confused, cheers!

Just had a look at my end of year statement for 2021 with revenue and I've underpaid income tax by near €800. I was wondering how I would go about getting that paid?

I am self-employed as a freelancer. For 2020 taxes, I received a federal refund. I did not make estimated tax payments throughout 2021. Should make a payment for Q4 next week before the deadline in order to avoid any underpayment penalty or am I off the hook with any penalties regardless of 2021 income due to the fact that I had no federal tax liability in 2020?

I consolidated a loan that was serviced by Navient with some other loans that I had at Fedloan. The consolidation was completed on 12/27/21. However, an underpayment was sent to Navient to pay off the loan so I have a small balance of about $60 remaining. Has anyone had this happen to them and if so how long did it take to resolve/did you have to contact your servicer or do anything to get it fixed?

Thanks!

Hey everyone,

I had more 1099 income in 2021 than I was expecting and wasn’t aware of the pay-as-you-go structure here in the US. Using some rough estimates, it looks like I’ll owe roughly $2k in federal and $700 in state taxes (which I already can’t afford thanks to no raise/bonus this year + inflation).

My withholding amounts for my W-2 income did not change, and thanks to a second job, I actually ended up withholding quite a bit more than I did in 2020. I withheld roughly $3k in 2020 and over $5500 in 2021 on my W-2s.

Does this provide safe harbor from the underpayment penalty or will I still need to file Form 2210? Since the form itself is for the 2020 tax year, I’m extremely confused how to proceed.

Thank you in advance!

What’s formula for calculating the penalty you will pay for underpayment of taxes? I can’t seem to find it on the IRS website.

https://www.irs.gov/taxtopics/tc306

I am trying to figure out how the tax penalty is calculated. Below is the scenario. Assuming, for 2021:

(1) I need to pay $60,000 for Federal tax ( total tax owed)

(2) In order to avoid the penalty, I need to withhold at least $54,000 (minimum required payment, 90% of $60,000) . Let's just use this 90% safe harbor rule, but not consider other rules.

(3) But I only withheld $50,000 from my employer. (my withhold amount)

(4) Assume the penalty interest rate is 3%

When IRS calculated the penalty, between (a) and (b) below, what is the base amount IRS uses to calculate the underpayment penalty?

(a) difference between the total tax owed(1) and the minimum required payment(2)? In this case it's $6,000 =$60,000-$54,000 . So total penalty would be $6,000 *3% =$180

(b) difference between the minimum required payment(2) and my withhold amount(3)? In this case , it's $54,000-$50,000 = $4,000. So total penalty would be $4,000 *3% =$120

Thanks.

Mind went from "oh the poor guy didn't notice" to "it was a plot all along and that person hates you"

I built something that does this for California's labor laws because they are some of the most employee friendly in the country and have the highest penalties. I originally built this over the last ~2 years as an afterwork project to learn some more CS skills because I work as a Data Analyst and previously a Data Scientist type of role at a law firm.

Essentially this tool lets you upload your timecard data (Clock-in & Clock-out) and then it computes shifts, OT requirements, meal violations, and quantifies those violations into liability. This was originally built to evaluate class action cases in CA, so it would be able to easily run a single person's data. Only thing is getting your historic timecard data from your employee or previous employer can be hard.

I don't want to post the tool since it is hosted on a limited access demo server, but just wanted to see if I should launch it more broadly. This is a screenshot to one of the main charts looking at simulated data for a single employee.

https://preview.redd.it/lg2hyhtanf581.png?width=2076&format=png&auto=webp&s=727280e9a199c53c8e503e4d0a16232bda44e314

EDIT: DM me and I can send a link to the working demo. It will allow you to upload data if you want to use it.

It has become so normal, some people accepted it, many suffer in silence. Even though there are options to report it to government, these people are scared of loosing their job, plus what is the point of reporting if they next company is doing the same. Contract Agreement says 8 hours, but Company becomes upset if someone wants to go home after working 10 hours. in addition, Not getting salary for 3 to 4 months has also become common among many companies. Labours get 1300 In average, not getting paid after working 12 hours is quite sad, It has come to my attention that even though employers are responsible for Visa, Yet they are neglegant about it, hence resulting the workers not being able to go for holidays. I am just ranting here, knowing I do not have any power to do anything about it either.

I haven't been paying estimated tax for 2021 since I earned no income throughout the year. If things go well I may get a decent lump sump payment in November as passive income on an investment. My first question is, will I pay a penalty on underpayment of estimated tax since IRS expects me to be paying estimated tax every quarter?

Second question I had is, if I decide to not pay any estimate tax for 2021 (even for Q4) and file for an extension and don't pay taxes until Oct of 2022, what % penalties will I be paying interest? I read that it's normally roughly 3% annually but is this calculated from January 2021? from January 2022?

I have a new client that has a large underpayment penalty ($15,000). This is based on the 110% safe harbor. The client receives most of his income from private equity investments. The client is a private equity manager. The client didn’t receive tax distributions until May of 2021 and didn’t want to go out of pocket for estimates. Have you ever asked/been asked for a breakdown of when the income allocated on a K-1 was deemed to be earned? My hope is that most of the income was earned later in the year, especially given the pandemic.

I have a quick question regarding the tax underpayment penalty, and how it relates to a home sale.

I sold my home in August, which I owned for about 14 months. I purchased it for $285,000, and sold for $432,000, so I know that I'll owe LTCG on the profit. What I'm unsure of is if I should be making a payment now, instead of waiting until I file my taxes in the spring? I would like to avoid any underpayment penalty.

Other than this home sale, I'm a regular W2 employee. I generally owe a few hundred dollars on my Federal taxes each year, and I don't itemize.

Thanks for the help!

I have a decent claim from when I was a grad and covered by the award and an arguable claim for when I was a jnr lawyer. I’m not with the same employer anymore, and I don’t need their references.

It wouldn’t be for the money, it’s not a huge amount and the time factor involved would exceed the monetary benefit. Honesty it would be for the principal and to call some attention to the exploitation of jnrs which is rife in the industry.

Do you think there would be professional blow back?