How to Avoid Underpayment Penalties When Doing Taxes

There's two ways that you pay your taxes: withholding and witholding. Withholding happens automatically when you can set it up, but the government gives you credit for not paying in december or november so they don't get a penalty. Self employede business owners who have some type of income structure coming in, and they just don't account for it. If you're one of these people, ask your pay roll administrator if they will run a special pay roll on you to withhold substantially more money than is required by law.