Arizona Form Underpayment of Estimated Tax by Individuals Include with your return 2025

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This penalty is . 5 percent of the tax unpaid for each month, or fraction of a month the tax remains unpaid. Individuals who fail to make a required estimated tax payment, underpayment of the correct amount or late payment will be charged an underpayment of estimated tax penalty.
Current rates 8%Personal income tax under- and overpayments 8% Corporation underpayment 8% Estimate penalties 5% Corporation overpayments
If you didnt pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax.
You understate your tax if the tax shown on your return is less than the correct tax. The understatement is substantial if it is more than the larger of 10 percent of the correct tax or $5,000 for individuals.
The failure to pay penalty is 0.5% of the unpaid taxes for each month or part of a month you dont pay, up to 25% of your unpaid taxes. Even worse, the IRS charges interest on penalties, which increases how much you owe. These interest rates are set quarterly.
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People also ask

Use form FTB 5805, Underpayment of Estimated Tax by Individuals and Fiduciaries, to see if you owe a penalty for underpaying your estimated tax and, if you do, to figure the amount of the penalty.
If you miscalculate and pay too much in taxes, that money isnt gone. The IRS will issue you a refund for the overpayment. However, even if you overpay for the year, Steber notes that you could face a penalty if any of your quarterly estimated payments were too low.
Purpose of Form Use Form 2210 to see if you owe a penalty for underpaying your estimated tax. The IRS will generally figure your penalty for you and you should not file Form 2210. You can, however, use Form 2210 to figure your penalty if you wish and include the penalty on your return.

arizona underpayment penalty