Worried about whether your tax withholding has been sufficient to avoid an underpayment penalty?

Underwithholding could cause an underpayment penalty a year from now.

Accountants warn that people who do not file their W-4 forms with their employers early may find themselves under-withheld and be subject to an underpayment penalty.

That shows good planning: the Taxpayers paid in enough to avoid an underpayment penalty but are not getting a refund.

Those who must pay estimated taxes this year may be able to avoid underpayment penalties by increasing their wage withholding at some point later in the year.

The agency assesses a quarterly underpayment penalty for those who fail to meet these requirements.

Thus, taxpayers who find they are liable for underpayment penalties with their 1989 returns, should consider making estimated payments in 1990 to avoid future trouble.

Tax professionals generally work with clients to put them in a balance-due situation, but not enough to incur an underpayment penalty.

But those taxpayers are subjecting themselves to underpayment penalties, as well as interest, which they could limit by amending returns.

Samuel and Felicity have not but have paid enough to avoid an underpayment penalty.