A taxpayer can automatically escape the penalty for underpayment of taxes by
A)owing less than $1,000 in taxes over and above the taxes withheld from wages.
B)owing taxes in the previous year.
C)having a casualty loss.
D)none of the above

Question

Quizplus · Accepted Answer

A taxpayer can avoid the penalty for underpayment of taxes if they owe less than $1,000 in taxes over and above the taxes withheld from their wages. This is referred to as the "safe harbor" threshold. If the taxpayer falls below this threshold, they will not be subject to the penalty for underpayment of taxes.

A Taxpayer Can Automatically Escape the Penalty for Underpayment of Taxes