Internal Revenue Service

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Avoid underpayment penalties by paying IRS an estimated tax

Tracy Bunner
Nov 11 2013 - 6:49pm

Income that is not subject to withholding -- such as earnings from self-employment, interest, dividends, rents, alimony, etc. -- is still taxable income. In order to avoid an underpayment penalty, you must pay estimated tax if both of the following apply.

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