Two New Exceptions to Underpayment Penalties Allowed
The revised instructions to Form 2210, Underpayment of Estimated Taxes Penalties for Individuals, Estates and Trusts reveal that two new exceptions to the Underpayment of Estimated Taxes will be allowed for tax returns filed for 2009.
First, a qualified individual with a small business will be permitted to make an estimated payment for 2009 of the smaller of 90% of the tax owed in 2008 or 90% of the tax owed in 2009. The individual qualifies if:
- Their AGI in 2008 was less than $500,000 ($250,000 if filing married separately), and
- More than 50% of their gross income in 2008 was from a small business.