You are REQUIRED to have withholding that approximates the amount of tax that you actually owe. If you have a W2 job and don't have some insane number of allowances patently unrelated to your deductions, this is normally going to be done for you. If you have a 1099 job, if you own a business, or if you make a bunch of money trading stocks, then you have to make estimated tax payments.

In order to avoid a penalty, one of the following has to be the case:

1. You have to have paid/had withheld 90% of your total tax obligation for this year

2. You have to have paid/had withheld 100% of your total tax obligation for the previous year (NEW: if you make over $150K, this is now 110%.)

3. You have to owe less than $1000

4. Your filing status has to have changed (e.g. you got married or divorced)

5. If you don't meet any of the above, they give you a form where you can grovel for forgiveness at the feet of Uncle Sam

Most people are going to be covered by one of these and so you're not going to owe a penalty. The problem is, this year, if you are in a high tax state or you are a high-income person, then you might be accustomed to deducting a large amount for your state and local taxes. If you didn't adjust your withholding to account for the loss of this deduction, then you suddenly find yourself not having enough withheld.

There are tons of online tax calculators out there and now that most people aren't itemizing any more, if you're salaried, it's pretty easy to look at your first pay stub of the year and figure out whether or not you're having enough withheld. Prior to the new tax law, there were a lot of unknown variables (like how much money am I going to give to charity this year). But now that you're probably not itemizing any more, the only unknown variables that are likely to have an effect is if you have investment income, commissions, or bonuses.