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Author: xraymd Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308225  
Subject: Re: It does hurt sometimes Date: 8/31/2003 2:48 PM
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Also, if you make enough money you have to pay quarterly estimated taxes, which I'm somewhat familiar with from my parents' business, but they could never tell me at what point your income's high enough for that to be required.

Greetings, again, mare, as I understand it: quarterly taxes must be paid when the amount you owe to the IRS, after all withholding has already been received, will exceed $1000 in taxes for the tax year.

It does not appear to be dependent directly on income.

If you pay withholding throughout the year in the form of automatic withholding from your wage paycheck but still owe extra due to self-employment taxes (including amounts owed for FICA and FHI) AND the extra you owe WILL EXCEED $1000 then you have to pay quarterly taxes.

It's a real snafu because it is pretty much impossible to go back in time to pay quarterly what you owe if your earnings had not yet accrued to the point of needing to owe more than $1000 in unwithheld taxes. (Clear as mud?) Just another way for the IRS to getcha. Others may have more sound advice on how to structure quarterly payments to avoid this circumstance but I will say that you are safe from underwithholding penalties, even if you don't file quarterly taxes, so long as your out-of-pocket tax check to the IRS (above and beyond whatever has been withheld on your behalf) sums to an amount under $1000.

xraymd
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