Ways to Avoid IRS Underpayment Penalties

If your tax bill is larger than expected, you may be in for another unpleasant surprise: an underpayment penalty. Taxpayers who owe Uncle Sam $1,000 or more are potentially subject to the penalty. But there are a few ways to avoid this double whammy.

80% waiver

For this tax season only, taxpayers who paid in at least 80% of their 2018 tax bill can escape the underpayment penalty, the IRS announced in late March. Normally, taxpayers must pay at least 90%