If you did not pay enough tax either through withholding or by making estimated tax payments, you will have an underpayment of estimated tax and you may have to pay a penalty.

Having completed copies of your latest federal income tax returns may help you through this chapter.

No penalty. Generally, you will not have to pay a penalty for 2000 if any of the following situations applies to you.

• The total of your withholding and estimated tax payments was at least as much as your 1999 tax, you are not subject to the special rule limiting the use of the prior year's tax, and you paid all required estimated tax payments on time.
• The tax balance due on your return is no more than 10% of your total 2000 tax, and you paid all required estimated tax payments on time.
• Your total 2000 tax (defined later) minus your withholding is less than $1,000.
• You did not have a tax liability for 1999.
• You did not have any withholding taxes and your current year tax less any household employment taxes is less than $1,000.

Special rules apply if you are a farmer or fisherman.

IRS can figure the penalty for you. If you think you owe the penalty but you do not want to figure it yourself when you file your tax return, you may not have to. Generally, the IRS will figure the penalty for you and send you a bill. However, you must complete Form 2210 or Form 2210-F and attach it to your return if any of the boxes in Part I apply. See Reasons for filing, later.

Previous | First | Next

Publication Index | 2000 Tax Help Archives | Tax Help Archives | Home