Tax Relief with Logan Allec, CPA

Paid 95% of My Taxes—So Why Did the IRS Penalize Me for Estimated Taxes?

Logan Allec

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0:00 | 3:43

Why did the IRS charge an underpayment of estimated tax penalty even though this taxpayer paid 95% of their 2025 tax bill by January 15, 2026?

The problem is that estimated taxes generally aren’t judged only by how much you’ve paid by the end of the year. When you made those payments can matter too.

In this video, I explain why making a large estimated tax payment late in the year may not eliminate penalties from earlier quarters, how the estimated tax safe harbors work, and when IRS Form 2210 and the annualized income installment method may help taxpayers whose income wasn’t earned evenly throughout the year.

I cover:

Why paying 90%+ of your tax doesn’t automatically eliminate an estimated tax penalty
How the IRS looks at estimated payments throughout the year
What happens when you make most of your payment in Q4
When uneven or seasonal income can change the calculation
How Form 2210 can potentially reduce or eliminate an underpayment penalty
Why taxpayers with back-loaded income may be treated differently

If you received an IRS penalty for underpaying estimated taxes, the key question may not simply be how much you paid—but when you paid it.

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