3.3398% is only assessed on the total underpayment, which is not calculated based on the amount due with return. So I guess if you're never paying any taxes, you'll end up owing around 3% on the underpayment, but as long as you pay something in or have tax withholding from other sources the penalty is less. Which is why I generally see a .5-1.5% average for my clients on the balance due with return.

The calculation is to take the lesser of 90% of current year tax or 100%/110% of prior year tax, subtract your withholding/est tax payments from that number, and then assess 3.3398%. So worst case scenario, if you're never paying anything in, it'll be a max of 3.3398% of 90% of current year tax. The variations between prior year tax and current year tax also factor into that average I stated.

Thanks, how and when do they assess this penalty?

for 2020 taxes I did not pay any estimated due to the uncertainty/Pandemic. When I filed using the same software as always there was a few questions I answered and got any fines waived by filling out another form.

Basically the question of have you experienced any hardship or disaster or something along those lines and I put the Pandemic. The software said it would be waived. It would not have been a huge fine any way.

Unfortunately, COVID does not qualify as a hardship or disaster related to the 2210 penalty.

The penalty is simply assessed on the tax filing using the calculation against your estimates/withholding paid.

The software probably isn't smart enough to recognize that typing Pandemic isn't a proper reason to have it waived.

Hey, yes I do

Nice - yeah, treat poker as if it were any other job and deduct any expenses that are both reasonable and necessary. Since tax law enjoys complicating things, 'necessary' is not to be meant in the 'emergency' or 'no other alternative' sense. To be deductible, a business expense must be both ordinary and necessary.

Per the IRS website, "An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary."

Here are some of the most recent changes/guidance in dealing with expenses/deductions as a professional gambler:

https://www.accountingweb.com/tax/in...d-in-tax-court

Good luck!

Thanks!