Penalty for Under Withholding Income Tax?

The line is pretty low, but I don't know exact. What I do know is I'm over it every year. But the penalty is minor. I do worry having to pay in every year will someday trigger an audit though.

You can pay an estimated tax payment by 1/15/13 using the IRS form in the link below and it will be applied to your 2012 withholding taxes just as if it came out of your paycheck.

Just keep a record of how much you paid and give it to your tax preparer or include the amount yourself if you do your own taxes.
LINK

You already said in your OP that you will owe "a LOT" on 4/15.

If you don't meet the safe haven rules for under withholding, you will have penalties and interest due on 4/15 along with your additional taxes.

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General rule.
In most cases, you must pay estimated tax for 2012 if both of the following apply.

You expect to owe at least $1,000 in tax for 2012, after subtracting your withholding and refundable credits.

You expect your withholding plus your refundable credits to be less than the smaller of:
-90% of the tax to be shown on your 2012 tax return, or

-100% of the tax shown on your 2011 tax return (but see Special rules for farmers, fishermen, and higher income taxpayers below). Your 2011 tax return must cover all 12 months.

If the result from using the general rule above suggests that you will not have enough withholding, complete the 2012 Estimated Tax Worksheet in the instructions to Form 1040-ES for a more accurate calculation.

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LINK

There are several methods of determining the minimum amount of tax you are required to have withheld and/or deposited by January 15, 2013. The easiest is if your withholding for 2012 equals or exceeds your 2011 tax liability, then you will not be subject to penalties (the minimum withholding amount is increased to 110% of prior year's tax liability for AGI's above $150,000 in 2011). If your withholding is less than your 2011 tax liability, then make an estimated payment on January 15, 2013 that will make up the difference between your 2012 withholding and your 2011 tax laibility.

You can then pay the balance of your 2012 tax on April 15th no matter how large it is without penalty.

I had the same shite happen to me a few years back and it was a total pain in the arse...poodle and russian give some good advice, but unless you are absolutely sure you are covered, I would just make a payment before the 15th. At todays interest rates, letting the fed hold some extra cash for a month or so is not a bad idea at all in that situation...

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Pay the underpayment by January 15th and file form 2210 with your return, and maybe you can avoid or reduce the penalty.

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The IRS has a "pay as you go" system so if he does have to pay estimated taxes and only makes a January payment, there will be a penalty for not making the other three payments.

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The tax liability and underpayment is calculated by quarter on the 2210. If his bonus caused the underpayment and the bonus was paid in the 4th quarter, no penalty.

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Now I'm confused all over again. The bonuses hit throughout the year but primarily in the first quarter.

However, the article linked above mentioned safe haven provisions, specifically the withholding of at least 110% of last year's tax liability.

My understanding is that the safe haven provisions, if met, dispel any underpayment penalties. Is there yet another clause that trumps the safe haven?

I do TurboTax every year, but one of these days I should go talk to an actual accountant.

ETA: Never mind, I remembered that PoodleBrain responded above. I will take that response to the bank.

If they try to audit me or hit me with an underpayment penalty, then I will print out this thread and send it to them via certified mail.