State tax penalities

[zetta]

I blew it on the 2007 California W-4. I tried to set up enough withholding from my husband's paycheck that we wouldn't need to pay estimated state taxes. Somehow I botched it and only about half of the required amount was withheld. So what kind of penalities are we likely to be in for? Is it better to send an estimated tax payment for the 4th quarter for the remainder a day after the cutoff (this being Jan 16) or not at all and hope the computer doesn't notice?

[Hypersion]

My dad under paid federal last year by a few thousand but his penalty was only $3.

[MonkeyMama]

It depends. Did you pay in 100% of last years' tax liability? (What I recommended earlier). If you did, then there would be no penalty.

FTB 5805 is the form to calculate penalty. Good Luck.

(LOL. Usually the software calculates it and I prefer just to let the state calculate it for you - they will. It is a little complicated.). In general I would say it probably won't be that much. (But it is really hard to say).

http://www.ftb.ca.gov/forms/07_forms/07_5805.pdf

[bjl584]

I did this one year, but there was a petition form enclosed in my state tax book that you could fill out if you felt that there was a valid reason for not paying enough of the estimated tax (math error, underestimating income, etc.) I filled out the form along with a short typed letter defending my reasons for not paying enough on time. I never heard anymore about it. If I were to have to pay the penalty it would have been something like $50.

[zetta]

Originally Posted by MonkeyMama

It depends. Did you pay in 100% of last years' tax liability? (What I recommended earlier). If you did, then there would be no penalty.

Unfortunately not. I tried to set it up this way, but there was a period of time that the employer was using the wrong number of exemptions, and I didn't catch it. I'll have to look back through the paychecks and see if I can make a case for it not being our fault...

[RedHotLama]

Isnt funny that if you under pay you get a penalty but if you over pay you get nothing in exchange.