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Filling out the forms to make the payments isn’t much more than submitting a check,
Actually, forgot to mention, the IRS rep told me that no form was needed to pay estimated tax. He said I just need to send in a check with the tax year and my ss# written on it, that's it. I joked that the IRS will be happy to receive any money without the need to know the reasons . But I don't think I would send a check to them so casually as if donating to charity, so I looked up and found there is indeed a form for calculating estimated tax 1040-ES, enough headaches. The penalties I have paid each time was about $100~200 IIRC. Although I never paid the estimated tax in advance for all these years, I didn't receive the letter most of the years.
They get enough of our money. I avoid any and all penalties and interest, here and elsewhere.
So, yes.... quarterly payments. Federal, state, and local.
Ditto. I usually decide to pay in prior year's tax obligation divided into quarterly payments. Turbotax generates the paperwork. A simple calendar reminder to mail in the estimated payments a week or so before they are do.
My federal income tax obligation is by far my largest expense each year.
Interesting the poll shows 0 votes for both responses that could be related to me. In my case, I have never paid in advance estimated taxes. The first time when I received letter for the penalty, I was not even aware that I was supposed to pay it. So I paid the penalty, and I simply forgot about it (or it was not a big enough deal for me to learn more about it for future plans). After the recent conversation with IRS rep, I was thinking about paying it this year, thought the first due date already passed. However, I may just leave it alone and pay penalty again, because I really hate the hassles of filling out forms. Also, if I deposit money in CDs to earn interests, what's the difference anyway?
Do you use Turbotax? It kicks out the paperwork for estimated payments.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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Retired.
1. Tax preparer still hasn't done our taxes, 2022 tax year (submitted docs in late March). Doing quarterly's, until such time I get the tax prep done. Why don't I change TaxPreparer? ans.Because the local preparers charge 50% more.
2. Income has been variable, positively for last 4 years, so we don't know precisely our tax obligations. Doing quarterly's.
3. I expect 2023 tax year, we may be able to start itemizing again (medical & dental expenses and medical insurances).
4. Increasing GLWB annuities's withdrawals to full allowable withdrawals instead of RMDs. Will be doing some QCD, 2023.
ytmv
The IRS will not charge you an underpayment penalty if: You pay at least 90% of the tax you owe for the current year, or 100% of the tax you owed for the previous tax year, or. You owe less than $1,000 in tax after subtracting withholdings and credits.
The United States income tax system is a pay-as-you-go tax system, which means that you must pay income tax as you earn or receive your income during the year. You can do this either through withholding (https://www.irs.gov/payments/tax-withholding) or by making estimated tax payments (https://www.irs.gov/help/ita/am-i-re...d-tax-payments). If you didn't pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and refundable credits, or if they paid withholding and estimated tax of at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller. There are special rules for farmers and fishermen, certain household employers and certain higher income taxpayers. For more information, refer to Form 1040-ES, Estimated Tax for Individuals (https://www.irs.gov/forms-pubs/about-form-1040-es).
Generally, taxpayers should make estimated tax payments in four equal amounts to avoid a penalty. However, if you receive income unevenly during the year, you may be able to vary the amounts of the payments to avoid or lower the penalty by using the annualized installment method. Use Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts (https://www.irs.gov/forms-pubs/about-form-2210) to see if you owe a penalty for underpaying your estimated tax.
The law allows the IRS to waive the penalty if:
You didn't make a required payment because of a casualty event, disaster, or other unusual circumstance and it would be inequitable to impose the penalty, or
You retired (after reaching age 62) or became disabled during the tax year or in the preceding tax year for which you should have made estimated payments, and the underpayment was due to reasonable cause and not willful neglect.
If this was for my benefit, it does not provide me any info that I was unaware of regarding filing quarterly. I am going to stand by my previous statement.
Do you meet one of the exceptions through withholding of 90% of the current year tax or 100% (110% for higher income taxpayers) of the prior year tax or owing less than $1,000?
I never considered why, I have never got a notice, a penalty or a comment from the IRS agent about it. He had to verify every transaction for an entire year, the Research Audit. Pretty sure he would have mentioned it if I was doing something incorrectly.
Turbo Tax does print out those quarterly remittance forms but I just toss them.
I never considered why, I have never got a notice, a penalty or a comment from the IRS agent about it. He had to verify every transaction for an entire year, the Research Audit. Pretty sure he would have mentioned it if I was doing something incorrectly.
Turbo Tax does print out those quarterly remittance forms but I just toss them.
do you have tax withheld during the year?
do you get a refund? If not, do you owe less than $1,000?
The rules are pretty specific. Just because the IRS hasn't sent a notice or missed it on an audit, doesn't mean that it doesn't have to be done, after all there's an entire statute (Section 6654) devoted to just this issue.
Now that I am self employed doing some consulting yes I have to pay quarterly. When I just had my pension I had taxes withheld from every paycheck.
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. But I don't think I would send a check to them so casually as if donating to charity, so I looked up and found there is indeed a form for calculating estimated tax 1040-ES, enough headaches. The penalties I have paid each time was about $100~200 IIRC. Although I never paid the estimated tax in advance for all these years, I didn't receive the letter most of the years.
