IRS Expands 2018 Estimated Tax Penalty Waiver March 22, 2019

Because of changes to the withholding tables, the IRS is generally waiving the penalty for any
taxpayer who paid at least 80% of their 2018 total tax liability during the year through federal
income tax withholding, quarterly estimated tax payments or a combination of the two. To
request the waiver, an individual must file a Form 2210, complete Part I, and check the waiver
box (Part II, Box A).

If the client already paid an estimated tax penalty based on the prior IRS notice allowing a waiver
if 85% of taxes had been prepaid, a refund can be claimed on Form 843. Include the statement
“80% waiver of estimated tax penalty” on Line 7.

Note. The usual percentage threshold to avoid a penalty is 90% of current year tax. The
penalty is also waived if withholding and estimated tax payments are at least 100%
(110% for some) of prior year tax.

Sharon Kreider, CPA, has helped more than 15,000 California tax preparers annually get ready for tax season. She also presents regularly for the AICPA, the California Society of Enrolled Agents, CCH Audio, and Western CPE. You’ll benefit from the detailed, hands-on tax knowledge Sharon will share with you—knowledge she gained through her extremely busy, high-income tax practice in Silicon Valley. With her dynamic presentation style, Sharon will demystify complex individual and business tax legislation. She’s a national lecturer for business and professional groups and consistently receives outstanding evaluations. In 2014, she was awarded the prestigious AICPA 2014 Sidney Kess Award for Excellence in Continuing Education.

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How The $3.5 Trillion Budget Blueprint Could Impact Your Clients

The new reporting requirements on brokers are addressed in Section 80603 of the bill. “Broker,” by definition in Sec. 6045 (c)(1), is expanded to include “any other person who (for a consideration) regularly acts as a middleman with respect to property or services…A person shall not be treated as a broker with respect to activities consisting of managing a farm on behalf of another person.” In turn, the bill defines a “digital asset” as “any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary.