My oldest child is hopefully going off to college next fall, so in preparation for the FAFSA I filled out a preliminary estimated tax return.
I thought I was on track with my withholding, but I apparently was not because of higher income and the fact that my oldest no longer qualifies for the child tax credit, and because I took some unplanned capital gains this month due to the fiscal cliff stuff.
I think I may be on the hook for a tax penalty because I don't meet the safe harbor provisions. My underpayment is more than $1,000. I did not pay 90% of my current year tax liability. I also did not pay more than 100% of my last year tax liability.
Does anyone know of any method to (legally, of course) avoid the penalty now? My last paycheck has already been processed, so I can't up my withholding. Can I send in an estimated tax payment and make it count for 2012 somehow? Other ideas?