What this notice means
Each year you're expected to prepay your tax through withholding from your pay, estimated tax payments or both. The IRS found you didn't prepay enough or paid late, so it charged a penalty.
The notice shows the amount and how to pay it. If you're due a refund or have no balance, there's nothing you need to do right now.
Why you got it
- Not enough tax was withheld from your pay during the year.
- You didn't make estimated tax payments, or you made them late.
What to do now
- Review your notice. It lists the amount and your payment choices.
- If you owe, pay by your notice's due date. If you can't pay it all now, look at the IRS's other payment options.
- If you're due a refund or have no balance, no action is needed right now.
- See if you can get the penalty removed or reduced. That may be possible if you or your spouse retired after age 62 or became disabled in the past 2 years and had reasonable cause, if most of your withholding happened early in the year, or if your income came in unevenly.
- Use the IRS Tax Withholding Estimator to check your withholding for next year.
Questions people ask
How much do I need to prepay to avoid this penalty?
You generally avoid it if you owe under $1,000 after filing, or if you prepaid at least 90% of this year's tax or 100% of the tax on last year's return, whichever is smaller. For AGI above $150,000, or $75,000 for married filing separately, use 110% of last year's tax instead. Farmers and fishermen follow special rules.
When are estimated tax payments due?
For most people, the four due dates are April 15, June 15, September 15 and the following January 15. If your tax year ends in a month other than December, use the 15th of your year's 4th, 6th and 9th months, plus the 15th of the first month of your next tax year.
When will I get my refund?
You should get it in 4 to 6 weeks. Once your return is processed, Where's My Refund shows your personalized date.