Good news may seem impossible when it comes to taxes and the IRS, but it arrives every so often. This is certainly true in 2019.
Many tax filers will be pleased to learn of an exciting development involving 2018 federal taxes: a notable underpayment penalty has been waived, allowing over 400,000 taxpayers to breathe a collective sigh of relief. If you fell short on your 2018 tax payments, you may be among this large group temporarily escaping the wrath of the IRS.
Who Qualifies For the Waived Penalty?
The IRS recently announced that it will waive all underpayment penalties for those who have already submitted federal income tax returns for 2018 and paid at least 80 percent of their tax liability — but who failed to previously claim special penalty waivers.
IRS Commissioner Charles Rettig explains, “This waiver is designed to provide relief to any person who filed too early to take advantage of the waiver or was unaware of it when they filed.”
The relief offered through this waiver could be considerable for many taxpayers, as preliminary IRS data indicates that the average underpayment penalty for the 2018 tax filing season totaled $180.
What Is the Purpose Behind This Year’s Waiver?
Don’t expect the recent waiver to be repeated in the future; it is largely being offered in order to assist those who struggled with changes related to the recently passed GOP tax bill. Between reduced tax rates, personal exemptions changes, and increased standard deductions, improper withholdings were shockingly common this year.
If you’re determined to avoid harsh IRS penalties, you’ll definitely want to consult the experts at the Highland Tax Group. We’re happy to assist you in this difficult process — reach out today to learn more.