DON’T LEND MONEY TO THE GOVERNMENT INTEREST-FREE

It is always nice to get a refund when you file your tax return; but if you think about it, that is money you could have had if you had not over withheld. There are many variables when determining how much to withhold.

A nice resource is on the IRS website. Check it out at Withholding Calculator.

IRS WAIVES PENALTY IF UNDERPAYMENT DUE TO REDUCED WITHHOLDING

The withholding tables were adjusted in the spring of 2009 to give taxpayers the immediate advantage of the Making Work Pay Credit (MWPC). However, the adjustments to the tables may have caused millions of taxpayers to be underwithheld, according to a recent report by the Treasury Inspector General For Tax Administration (TIGTA). Now, in the wake of this highly critical report, IRS has decided to waive the penalty for an underpayment caused by the adjustments to the tables. It has been fixed but you should see the form that you must fill out to avoid that portion of the penalty. How to get the waiver.

To request the waiver, a taxpayer must check box A or box B in Part II of Form 2210. Box A is used to request a waiver of the entire penalty. In such a case, a taxpayer need only complete page 1 of Form 2210 and attach it to his return. The taxpayer is not required to figure the amount of penalty to be waived. Box B is used to request a waiver of part of the penalty. In such a case, the taxpayer must figure the penalty and the waiver amount on Form 2210.