Tax Law Insights

Changes have been made to the income tax withholding tables and estimated tax rates as a result of the new Tax Cuts and Jobs Act.  Taxpayers should pay extra attention now to their tax withholdings and estimated tax payments in order to avoid penalties.

Taxpayers can generally avoid underwithholding/estimated tax penalties if they:

1. 1. 1. Pay 90% of the current year liability, or
      2. Pay 100% of the prior year liability.

However, If a taxpayer’s adjusted gross income for the prior year was more than $150,000, the taxpayer must then have withholdings or estimated tax payments for the current year ...