Underpayment Penalty Law and Legal Definition
Underpayment penalty is a tax penalty enacted on an individual for not paying enough of his/her total estimated tax and withholding. If a person has an underpayment of estimated tax, he/she must have to remit a penalty on Form 2210. A taxpayer can avoid underpayment penalties by paying the either 100% of previous year's tax or 90% of current assessment year's tax in combined estimated and withholding tax payments.
The underpayment penalty is a fixed amount of interest, ranging from 4 to 10 percent, additional to the total amount owed to the Internal Revenue Service (IRS). Generally, the Internal Revenue Service serves 90 days intimation to the faulty taxpayer and he/she must have to respond with in the stipulated time before the penalty is assessed.
Legal Definition list
- Underpayment [Mineral Leasing]
- Underlying Mortgage
- Underlying Lien
- Underlying Commodity
- Underlying Asset [Banks & Banking]
- Underpayment Penalty
- Underrepresented [Education]
- Underrepresented in Areas of National Need [Education]
- Underrepresented in Science and Engineering [Education]
- Undersecured Claim
- Undersecured Debt
