Tag Archives: underpayment penalties

In a significant development that spells trouble for gig economy workers and consultants, the Internal Revenue Service (IRS) has sharply increased the penalty for tax underpayments. The penalty, which has nearly tripled since 2021, has now reached 8% as of October 1, a considerable jump from the 3% rate observed just two years ago. This […]

The utilization of tax withholding can be employed to avoid penalties for underpayment of taxes. Income taxes withheld from wages are considered to be paid evenly throughout the tax year, unless the taxpayer can provide evidence of the specific dates when the amounts were actually withheld. This rule provides taxpayers with three strategies to reduce […]