Thanks to error by my annuity provider, they did not
implemented a requested increase to my withholding. As a
result, when I file my return this spring, instead of
slipping in just under the $1000 threshold for owing no
penalty, I will owe about $2000. This was the last of my
2021 quarterly payments from this annuity, so no chance to
withhold the amount going forward.
Is the IRS likely to do anything but charge me interest ?
(FWIW, the reason my taxable income was so much higher is
that I decided to sell a bunch of stock, hence long-term
capital gains).
What is my best course of action now ? Should I make a
$2000 estimated-tax payment now ? I'll still owe interest
(if I don't file Scedhule AI) because I missed the first two
estimated-tax deadlines, as well as the third. But
presumably it'll be a bit less interest, and perhaps more
importantly, I imagine it'll be less likely to raise
eyebrows at the IRS than if I wait until I file my return.
Do you have any other sources of income where tax is
withheld or can be withheld ...
If you can't adjust other withholding, make the estimated
tax payment now.
Don't stress about the IRS giving you a hard time. They
aren't going to come after you about a $2,000 payment due,
and owing $2,000 with your return is not going to "raise
eyebrows" or trigger an audit.
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