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The OP specifically referenced not paying the THIRD QUARTER'S estimated taxes. Not the entire year. Second of all, I DID, in fact, mention the penalty, in the post that Petunia SPECIFICALLY REFERENCED for you long before you started posting in this thread. Please see POST #12 in this thread. Sorry you missed it.
Third, an individual with an income of "40K to 60K" will only have a total income tax liability of $13K or higher (about what you need to average $6,700 over the entire year) if they are single, only have the standard deduction and personal exemption, AND most of their income is subject to SE tax, AND...well, they pretty much have to be north of 50K income, "40K" won't cut it. And that assumes they haven't paid dime one in taxes the entire year.
And even in THAT situation, they total penalty would be a whopping $200.
Last, I did NOT say "be lazy and accept the penalty". I DID say, in the aforementioned post, to "make whatever quarterly payment you believe is necessary as soon as is reasonably possible, then at tax time fill out Form 2210". I did note that the penalty would not be overly large and therefore not to stress too much.
But really, I appreciate the lecture on how income taxation works. And given Petunia's post, I'm assuming that poster appreciates it as well.
"The OP specifically referenced not paying the THIRD QUARTER'S estimated taxes."
Nope. You are wrong. The OP never said this. They said: "Thx to all. I just never paid any of it as I forgot. Last year was my 2st year as a 1099 contractor and was horrified at what I had to pay. I will make less this year."
Their comments are vague, but they never specifically referenced the 3rd quarter.
"Second of all, I DID, in fact, mention the penalty, in the post that Petunia SPECIFICALLY REFERENCED for you long before you started posting in this thread"
My apologies. I did miss where you said the 3%. I joined onto this thread late.
I still disagree with you on the $200. 3% is wasted money. Whether it is $200 or $2000. If the OP runs a business, it is very likely that their taxable profits are above $50k. I took it as they paid no taxes throughout the year. I would like to ask them more questions, but it seems they dropped out of this thread.
"The OP specifically referenced not paying the THIRD QUARTER'S estimated taxes."
Nope. You are wrong. The OP never said this. They said: "Thx to all. I just never paid any of it as I forgot. Last year was my 2st year as a 1099 contractor and was horrified at what I had to pay. I will make less this year."
Their comments are vague, but they never specifically referenced the 3rd quarter.
Well, crud. Rereading the whole thing again, you're correct. My apologies are in order now.
Quote:
Originally Posted by Nolefan34
"Second of all, I DID, in fact, mention the penalty, in the post that Petunia SPECIFICALLY REFERENCED for you long before you started posting in this thread"
Quote:
Originally Posted by Nolefan34
My apologies. I did miss where you said the 3%. I joined onto this thread late.
I still disagree with you on the $200. 3% is wasted money. Whether it is $200 or $2000. If the OP runs a business, it is very likely that their taxable profits are above $50k. I took it as they paid no taxes throughout the year. I would like to ask them more questions, but it seems they dropped out of this thread.
And I accept your apology, hope you'll acccept mine earlier.
3% (or less) is wasted money, but many people think "OHMYGERD, IRS PENALTY" and panic. The "penalty" is an interest charge, and we're currently in a low-rate environment. So compared to the tax burden, it's pretty low. Hence my advice to the OP to figure out what's owed, pay it promptly but not in a mad rush (at this point, even taking an extra week to figure everything out is a minimal added cost), and deal with the penalty at filing time. They can't undo what they've already done.
I have no idea what the various services charge for preparing tax forms, but the added cost of having someone fill out the 2210 might be more than their overall penalty. Who knows?
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