Hello I have a question regarding possible tax penalty. I called IRS and was told by some agent as long as you have a refund you don't own penalty, which is obviously not true for line 77. I don't owe penalty for 2013, but because my employer over deducted my 401k in first quarter 2014, I might be under deducted for the first quarter of 2014 and is trying to figure out if I might face tax penalty for not paying enough quarterly?
1. Hypothetically my tax for 2013 is $800. My employer deducted $300 for first quarter, $150 for second quarter, $130 for third quarter, and $300 for the last quarter. I will be considered late payment for third quarter (paid total $580<600>$400) by the pay-as-you-go approach, correct?
2. By my 2014 tax estimate the tax withheld for the first quarter of 2014 seems to be $1200 short of the quarterly payment. I have a refund of $3500 on tax return to be filed tomorrow. If I apply part of this $3500 say $1500 on line 75, will I be considered having made extra $1500 to my 2014 tax by Apr 15 2014? Or the payment is only counted until they finish processing the return which means I still didn't pay enough estimated tax by the first due quarterly due date?
Thanks for your input on this.
estimated tax penalty
Moderator: Mark T Serbinski CA CPA
