Ahh, the "P" word! While no one likes paying taxes, having to pay a penalty on your tax return is even worse. Here are the guidelines to avoid being subject to a penalty for underpayment of taxes:
The IRS provides 2 thresholds for avoiding a penalty - you have to pay in the lower of 100% of your 2008 tax liability (this is the total tax line on Form 1040 - line 61) or 90% of your 2009 tax liability. If your AGI (the bottom line number on page 1 of Form 1040) was over $150,000 on your 2008 tax return, the threshold is the lower of 110% of your 2008 tax liability or 90% of your 2009 tax liability.
In Illinois the threshold is the lower of 100% of your 2008 Illinois tax liability (line 21 on Form IL-1040) or 90% of your 2009 tax liability - no matter what your AGI was in 2008.
If it appears that you may not have paid in enough you may still be able to have additional tax withheld through your employer or make an estimated tax payment. It is best to work with a tax advisor to fully understand the options available to you.
Finally, remember that these thresholds only protect you against a penalty. You may still have a balance due on your actual tax return.
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