When should you get your annual flu shot? AARP has advice for you.
by AARP Tax-Aide, AARP, May 9, 2008
Q: I had to pay a bundle with my tax return, and my AARP preparer said I would probably be assessed an underpayment penalty. What is this all about, and how can I avoid it next year?
A: We are expected to pay most of our taxes throughout the year and not to wait until we file our tax returns. If we have too large a balance due when we file our returns, the IRS can assess a penalty for not paying enough during the year.
If you have income which is not subject to withholding taxes, such as interest, dividends, and pensions, consider paying estimated taxes during the course of the year. Estimate what your unpaid tax may be for 2008, then pay 1/4 of it on April 15, June 15, Sept. 15, 2008, and Jan. 15, 2009. Complete form 1040-ES to submit with each payment.
You will not be subject to an underpayment penalty in any of the following circumstances:
Some people don't like to pay with their returns, so they try and make estimated payments large enough to cover their entire tax liability. Others like to keep their money as long as possible and only try to pay enough to avoid an underpayment penalty, even if they wind up paying a sizeable amount with their return. It’s your choice.
These questions are actual inquiries submitted by taxpayers to our AARP Tax-Aide Program. The AARP Tax-Aide Program is a volunteer-run, free tax-preparation and assistance program offered to low- and middle-income taxpayers with special attention to those age 60 and older. Our volunteers are trained and IRS-certified to understand individual federal-tax issues. Our volunteers provide tax assistance as a public service and cannot guarantee the accuracy of the information provided.
Please leave your comment below.
You must be logged in to leave a comment.
Members can print free coupons at the Grocery Coupon Center powered by Coupons.com.
Members save 25% on purchases of $200+ and get free basic lenses or 25% off lens upgrades.
Members save 10% on their check every day.
AARP members receive exclusive member benefits & affect social change.
You are leaving AARP.org and going to the website of our trusted provider. The provider’s terms, conditions and policies apply. Please return to AARP.org to learn more about other benefits.
Your email address is now confirmed.
Manage your email preferences and tell us which topics interest you so that we can prioritize the information you receive.
Explore all that AARP has to offer.
In the next 24 hours, you will receive an email to confirm your subscription to receive emails
related to AARP volunteering. Once you confirm that subscription, you will regularly
receive communications related to AARP volunteering. In the meantime, please feel free
to search for ways to make a difference in your community at