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IRS penalty for underpaying estimated taxes jumps to 8% of the shortfall from 3% two years ago - wit

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240B:

DAILYMAIL.COM
By KEITH GRIFFITH
3 December 2023

* Fine for underpayment of estimated taxes have been risings with Fed's rate hikes
* Penalty hit 8% as of October 1, up from lowest possible 3% in early 2021
* Fine mainly applies to self-employed workers who pay taxes each quarter (more)
https://www.dailymail.co.uk/news/article-12819525/IRS-penalty-underpaying-estimated-taxes.html

More good news from the 'Bidenomics' administration. Remember how they said income tax reforms would only affect the super-wealthy? Well, that was a lie. We knew they were lying when they said it. And we were right.

What's even more comforting is that in the Biden administration all the IRS agents are strapped. They now carry weapons with them to enforce IRS edicts.

America has the silliest tax system ever in history. The government knows your income. They know exactly how much you owe. But they will not tell you what it is. You have to guess. Or as they call it, you have to 'estimate'. And if you guess wrong, you go to jail. The most bizarre tax system ever.

Elderberry:
Back when there was no underpayment penalty, my dad would not pay until after his exemptions ran out in December and then, only after he received the 3rd demand letter from the IRS.

The_Reader_David:

--- Quote from: 240B on December 03, 2023, 03:19:14 pm ---... The government knows your income....

--- End quote ---


Income from self-employment is profit, not revenue.  The government does not know your income, even if all your revenue shows up on a 1099, since they don't know your expenses until you tell them.  And there is revenue they don't know about, as well:  cash payments, small checks, small electronic payment. 

My wife is a psychologist, and yes, the payments from health insurance companies are reported to the Feds on 1099's, but copays, coinsurance and deductibles paid by clients, payments from self-pay clients, payments from debt collectors who tracked down deadbeats who didn't pay what they owed under the terms of their insurance, and expenses which have to be deducted from revenue to give actual income are not reported to the government except by us.

Elderberry:

--- Quote from: 240B on December 03, 2023, 03:19:14 pm ---America has the silliest tax system ever in history. The government knows your income. They know exactly how much you owe. But they will not tell you what it is. You have to guess. Or as they call it, you have to 'estimate'. And if you guess wrong, you go to jail. The most bizarre tax system ever.
--- End quote ---

My brother in law was a CPA and he just loved doing battles for clients at each IRS appraisal. It didn't matter what was written on the original tax return. He was able to overwhelm the IRS agents with data until he was able to often get the agent to agree to a return that required his client to pay less taxes than the original return.

libertybele:

--- Quote from: Elderberry on December 03, 2023, 04:29:42 pm ---My brother in law was a CPA and he just loved doing battles for clients at each IRS appraisal. It didn't matter what was written on the original tax return. He was able to overwhelm the IRS agents with data until he was able to often get the agent to agree to a return that required his client to pay less taxes than the original return.

--- End quote ---

That's a wonderful CPA!

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