What Happens if You Fail to Make Your Estimated Tax Payments
By Fanta Kaba
(OnPoint Resolution LLC)
As a taxpayer in Mount Laurel, NJ, you are required to make estimated tax payments throughout the year. Failure to do so can result in serious penalties and fees from the IRS. Let’s take a look at what happens if you fail to make estimated tax payments and how you can avoid it. Estimated Tax Penalties The most common penalty for failing to make estimated tax payments is the “underpayment of estimated taxes” penalty. This penalty applies when you don’t pay enough taxes throughout the course of the year and/or when your payments are late. The amount of this penalty depends on how much you underpaid, as well as how many months it was unpaid for. For example, if you underpaid by more than 10%, then you will be charged 5% per month until payment is made in full. In addition to the underpayme...