I have a client, that is always underpaid on their withholding and never makes estimates - so the usual underpayment penalty is $ 250 - $ 400. They have some high dividend income.
In 2010 - one of the holdings that was producing the high dividend income - liquidated them for about 90% of their investment , so now I not only have high wages, and dividend income, but a capital gain. I am well over $1 mil AGI
I calculated the additional taxes due, however, the tax client did not pay until the drop dead date of 1-17-11 for 2010.
Now if I run all through my software - I have an underpayment penalty of over $ 1,000 on Fed, plus another amount on State which happens to be Calif.
Question - Do I let the software calculate the underpayment penalty and have the t/p pay, or do I prepare the "waiver" due to ???? and let the Agencies come back to us and calculate the underpayment and bill the t/p?
There is about $ 1,500 or so that the software is calculating for both Fed and State - so that is a lot of money.
Thoughts ???
Sandy
In 2010 - one of the holdings that was producing the high dividend income - liquidated them for about 90% of their investment , so now I not only have high wages, and dividend income, but a capital gain. I am well over $1 mil AGI
I calculated the additional taxes due, however, the tax client did not pay until the drop dead date of 1-17-11 for 2010.
Now if I run all through my software - I have an underpayment penalty of over $ 1,000 on Fed, plus another amount on State which happens to be Calif.
Question - Do I let the software calculate the underpayment penalty and have the t/p pay, or do I prepare the "waiver" due to ???? and let the Agencies come back to us and calculate the underpayment and bill the t/p?
There is about $ 1,500 or so that the software is calculating for both Fed and State - so that is a lot of money.
Thoughts ???
Sandy
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