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previous page Previous Page: Publication 505 - Tax Withholding and Estimated Tax - Underpayment Penalty for 2008
next page Next Page: Publication 505 - Tax Withholding and Estimated Tax - Figuring Your Required Annual Payment (Part I)
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication
taxmap/pubs/p505-021.htm#en_us_publink10007521

Exceptions(p55)


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Generally, you do not have to pay an underpayment penalty if either:
taxmap/pubs/p505-021.htm#en_us_publink10007522

Less Than $1,000 Due(p55)


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Less Than $1,000 Due

You do not owe a penalty if the total tax shown on your return minus the amount you paid through withholding (including excess social security and tier 1 railroad retirement (RRTA) tax withholding) is less than $1,000.
taxmap/pubs/p505-021.htm#en_us_publink10007523

Total tax for 2008.(p55)


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For 2008, your total tax on Form 1040 is the amount on line 56 increased by certain other taxes and reduced by certain refundable credits.
Add the total of the following taxes to the amount on Form 1040, line 56.
From the total of Form 1040, line 56 and the other taxes listed above, subtract the following refundable credits.
Your total tax on Form 1040A is the amount on line 37 minus the amount on lines 40a, 41, and 42. Your total tax on Form 1040EZ is the amount on line 11 minus the amount on lines 8a and 9.
taxmap/pubs/p505-021.htm#en_us_publink10007524

Paid through withholding.(p55)


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For 2008, the amount you paid through withholding on Form 1040 is the amount on line 62 plus any excess social security or tier 1 RRTA tax withholding on line 65. On Form 1040A, the amount you paid through withholding is the amount on line 38 plus any excess social security or tier 1 RRTA tax withholding included on line 43. On Form 1040EZ, it is the amount on line 7.
taxmap/pubs/p505-021.htm#en_us_publink10007525

No Tax Liability Last Year(p56)


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No Tax Liability Last Year

You do not owe a penalty if you had no tax liability last year and you were a U.S. citizen or resident for the whole year. For this rule to apply, your tax year must have included all 12 months of the year.
You had no tax liability for 2007 if your total tax was zero or you were not required to file an income tax return.
taxmap/pubs/p505-021.htm#en_us_publink10007526

Example.(p56)

Ray, who is single and 22 years old, was unemployed for most of 2007. He earned $2,700 in wages before he was laid off, and he received $2,500 in unemployment compensation afterwards. He had no other income. Even though he had gross income of $5,200, he did not have to pay income tax because his gross income was less than the filing requirement for a single person under age 65 ($8,750 for 2007). He filed a return only to have his withheld income tax refunded to him.
In 2008, Ray began regular work as an independent contractor. Ray made no estimated tax payments in 2008. Even though he did owe tax at the end of the year, Ray does not owe the underpayment penalty for 2008 because he had no tax liability in 2007.
taxmap/pubs/p505-021.htm#en_us_publink10007527

Total tax for 2007.(p56)


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For 2007, your total tax on Form 1040 is the amount on line 57 increased by certain other taxes and reduced by certain refundable credits.
Add the total of the following taxes to the amount on Form 1040, line 57.
From the total of Form 1040, line 57 and the other taxes listed above, subtract the following refundable credits.
Your total tax on Form 1040A is the amount on line 37 minus the amount on lines 40a and 41. Your total tax on Form 1040EZ is the amount on line 10 minus the amount on line 8a.
previous pagePrevious Page: Publication 505 - Tax Withholding and Estimated Tax - Underpayment Penalty for 2008
next pageNext Page: Publication 505 - Tax Withholding and Estimated Tax - Figuring Your Required Annual Payment (Part I)
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication