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IRS to Give Taxpayers a Break On Penalties This Year

Posted by Cailey Taylor on Jan 30, 2019 10:00:00 AM

Good news for taxpayers that are going to owe more than they thought this year, the IRS is giving you a break. The agency said that it won’t penalize individuals who underpaid their estimated taxes for 2018, as long as they have paid 85% of what they owe. Due to the Tax Cuts and Jobs Act of 2017, taxpayers may not know all the changes that affect them and could have miscalculated how much they actually owe.

This year will be the first year that all the changes from the tax cuts and jobs act will be in effect. The tax reform took away several tax deductions, increased certain tax credits and took away personal exemptions. Taxpayers who also wrote off unreimbursed employee expenses will lose that deduction as well. The standard deduction was also doubled for all taxpayers. All the different changes will not only affect how much a taxpayer writes off but can affect if they decide to take the standard deduction or if they are going to itemize their deduction.

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Since the tax reform was passed, the IRS has worked to explain or give guidance on different changes, but for several tax deductions and write offs, there are still gray areas on what is acceptable and what isn’t. Because of this, the IRS is trying to help taxpayers who are trying to navigate the changes.

If you are a salaried worker and have your taxes withheld from your paycheck, you make check your withholdings. If you are a business owner or self-employed, you may benefit from the IRS’s announcement. If you did not pay all the taxes you owe, you must pay the IRS the additional tax you owe by April 15th or request a six-month extension.

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