There one more safe harbor limit that is often not mentioned: if you owe less than $1000 you will not owe a penalty.The Required Annual Payment is calculated in Part I of Form 2210 and is the lesser of 90% of the current year's tax and 100% (110% for high-income taxpayers) of the previous year's tax. And right after determining the Required Annual Payment, the next question asks if the Required Annual Payment more than that year's withholding. If it is not, you have met the safe-harbor minimum and don't owe a penalty.
I highlighted your comment in order to add a clarifier/question: If one of the safe harbor rules is over 90% of total tax due. Some might think that the highlighted comment means 100% of this years taxes. To keep it simple, if one owed $10,000 total tax for the year, by withholding $9,000.01, it's my belief that the safe harbor is met? I don't cut it that close, but if my tax bill was 29,800, I would aim for total withholding to be about 27,200, which leaves me a little wiggle room. Although I know many don't want to cut it that close.
https://www.irs.gov/payments/underpayme ... ls-penalty
Wrench
Statistics: Posted by Wrench — Thu Oct 16, 2025 7:39 pm — Replies 196 — Views 25690