Possible Waiver for 2018 Failure to Meet Estimated Tax Obligations
When the Tax Cuts and Jobs Act (TCJA) went into effect in 2018, it caused many tax-related changes for businesses, including changes regarding tax withholdings. The result was many companies that failed to withhold enough to cover their end-of-the-year tax obligations. Generally, if a company fails to cover 90 percent or more of their estimated tax, it can face serious penalties from the Internal Revenue Service (IRS). While the IRS emphasizes the importance of accurately estimating taxes, it understands that obligations can vary from year to year, and the agency provides a 10 percent leeway without penalties. A larger discrepancy can result in tax compliance issues and fines. The TCJA, however, caused problems for many taxpayers when it came to matching their withholdings to their newly calculated tax obligations. Because…