Quote:
Originally Posted by Racer Boy
...but my withholding was decreased, so I ended up owing a lot more. In fact, since I didn't withhold enough, I also got socked with a nearly $900 penalty.
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That happened to me one year when I did a lot of contracting and I owed around $5000 extra at tax time. There would have been an underpayment penalty, but since I hadn't manually decreased my withholding from the previous year, there was no penalty for underpaying for *that* year, but I had to increase my withholding for the following year or I would get a penalty next year. So maybe, since this occurred with no changes by you, you can get out of it?