Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Refund and Amount of Tax Owed

Estimated Tax Penalty

Estimated Tax Penalty

The estimated tax penalty is calculated on Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts, and is reported on the applicable line in the Amount You Owe section of Form 1040. While completion of Form 2210 is beyond the scope of the VITA/TCE programs, it is important for volunteers to know about the estimated tax penalty provisions.

Generally, taxpayers may owe a penalty for underpayment of estimated tax if they did not pay enough tax, either through withholding or by making estimated tax payments.

In most cases, taxpayers must make estimated tax payments if they expect to owe at least $1,000 in tax (after subtracting withholding and credits) and their withholding and credits will be less than the smaller of:

  • 90% of the tax shown on the current tax return, or
  • 100% of the tax shown on the prior year's tax return (110% for certain higher income taxpayers; see Form 1040-ES)

An estimated tax penalty may apply if the taxpayer does not make estimated tax payments as required.

Form 1040 showing estimated tax penalty line.
Form 2210

Form 2210