Underpayment Penalty
 |
Definition of 'Underpayment Penalty'A tax penalty enacted on an individual for not paying enough of his or her total estimated tax and withholding. If an individual has an underpayment of estimated tax, they may be required to pay a penalty (on Form 2210). |
 |
Investopedia explains 'Underpayment Penalty'To avoid an underpayment penalty you must pay either 100% of last year's tax or 90 percent of this year's tax by combining estimated and withholding taxes. |
Related Definitions
Articles Of Interest
-
10 Money-Saving Year-End Tax Tips
Getting organized well before the deadline will curb your frustration and your tax liability. -
5 Retirement Plan Moves To Make Before Year-End
Make sure all your loose ends are tied with these simple reminders and tips for your plans. -
Cost Basis Basics
The term "cost basis" refers to the original value of a security you own. When you sell a stock, bond or mutual fund, you use the cost basis to determine your profit or loss, which in turn affects ... -
Tax Forms Every Investor Must Understand
Recent legislation has added a few new items to the list of tax forms that taxpayers must use to report their investment income. Know which forms you will need to file your taxes this year. -
Investment Tax Basics For All Investors
Nothing can be said to be certain, except death and taxes even in your investments. -
Investing In Stock Rights And Warrants
Many companies choose to issue rights or warrants as an alternative means of generating capital to avoid dilution of existing share value. -
All About Zero Coupon Bonds
Zero-coupon bonds are bonds that do not make any interest payments (which investment professionals often refer to as the "coupon") until maturity. For investors, this means that if you make an ... -
What Determines Your Cost Basis?
In any transaction between a buyer and seller, the initial price paid in an exchange for a product or service will qualify as the cost basis. When it comes to securities and related financial ... -
Know Your Stock Cost Basis
Understanding equity cost basis is critical for tracking the gains or losses of an investment. -
There Are New REITs On The Horizon
For investors, the surge in new REIT activity is providing some pretty interesting dividend opportunities.
Free Annual Reports