Craig Wear, CFP®Craig Wear, CFP® | Expert in Roth Conversions & Tax-Efficient Retirement Strategies for IRA Millionaires

Are You Overpaying or Underpaying Taxes?

17 Aug 2024 · 1 min

Watch on YouTube

0:37

This YouTube video (hosted by Craig Wear, CFP®) explains risks of underpaying taxes and IRS safe-harbor rules to avoid underpayment penalties. The speaker says paying 100% of the current year's tax liability will generally avoid underpayment penalties, but if your adjustable gross income (AGI) exceeds $150,000 you should pay 110% of the total tax liability to meet the safe-harbor guideline.

Questions this video answers

Paying 100% of the current year's tax liability.

If adjustable gross income (AGI) is over $150,000, pay 110% of total tax liability.

Chapters

If you underpay it. There's a potential for having a penalty for underpayment, but the IRS has what are called safe harbor rules. Paying 100% of this current year's tax liability will work as long as you know what that is. So as long as you get enough paid in, you're good. There's. But the safe harbor rules tell you say that if you if your adjustable gross income is over 150,000, you need to pay 110% in of what your total tax liability would be to help avoid underpayment.