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Hi all,

My fiance always has to pay quarterly for estimated taxes.

He's wondering if instead of paying quarterly he can just pay it all in one payment up front because of the hassle-factor of remembering and having to make the separate payments.

I'm assuming you should be able do this, but is there any info on exactly what you do - do you just pay the full amount on the first quarterly payment date and then just not do anything else until you file your taxes?

He's already filed his 2012 taxes, and the tax software generated the quarterly payment amounts and coupons for this year with that. Does that matter in terms of if he can pay one payment instead?
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My fiance always has to pay quarterly for estimated taxes.

He's wondering if instead of paying quarterly he can just pay it all in one payment up front because of the hassle-factor of remembering and having to make the separate payments.

I'm assuming you should be able do this, but is there any info on exactly what you do - do you just pay the full amount on the first quarterly payment date and then just not do anything else until you file your taxes?


That's all he needs to do.

Everything following is unsolicited advice from Phil's "Tips for a Successful Marriage." Feel free to move on without reading.

I just finished my 2012 taxes and the scheduling of my 2013 ES payments. With interest rates what they are, it probably doesn't earn me $10, but I'm not forking over a dime before I have to. It didn't take me 5 minutes to set up the payments through www.eftps.gov and put them in my budget spreadsheet so I remember to have the money in my checking account when the EFT happens. We're not talking rocket science.

If this is a "ring and a date" fiancé (as opposed to a "we can't think of anything else to call each other after all these years" fiancé) and you plan to merge your finances after marriage, make sure you're the one who's in charge. If he finds four estimated tax payments daunting it doesn't bode well.

Phil
Rule Your Retirement Home Fool
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Thanks, Phil,

We're getting married this summer. We will be merging finances and will each be coming into the marriage with no debt (other than houses) and approximately the same amount (pretty decent amount) each of savings and investments.

I do hope to be the main financial person, because I feel like I am financially-minded and generally like thinking about that area. Although he's very smart (he's a PhD and super good at computers, math, and science).

My thought is to not pay ahead on the principle of the thing, not wanting to give the government money earlier than necessary. But he has enough extra money that he can afford to do this, he feels the way he has things set up it is a hassle, and as you said, we aren't earning much in interest on keeping the money with rates so low.

I'm wondering if we'll have much difference in our taxes for 2013 because we'll be filing jointly. I earn about 1/2 what he does, and usually I get a small refund.

I was considering plugging our 2012 numbers into the tax software as if we'd been married, just to see how things look as a prediction, but so far I haven't had the time. I wonder if this would be a good exercise, although if there was an impact, I don't know what we'd do about it.
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We're getting married this summer.

All best wishes.

I was considering plugging our 2012 numbers into the tax software as if we'd been married, just to see how things look as a prediction, but so far I haven't had the time. I wonder if this would be a good exercise, although if there was an impact, I don't know what we'd do about it.

There's a lot you can do about it, and today's not too soon. For example, if it looks like you're going to come up way short he could increase his ES payment or you could decrease your withholding allowances. You want April 15, 2014 to have nothing but happy surprises.

Phil
Rule Your Retirement Home Fool
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There's a lot you can do about it, and today's not too soon. For example, if it looks like you're going to come up way short he could increase his ES payment or you could decrease your withholding allowances. You want April 15, 2014 to have nothing but happy surprises.

I prefer to just adjust the W-4 instead of making estimated payments.

PSU
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I prefer to just adjust the W-4 instead of making estimated payments.

Do you mean "instead of making larger estimated payments"? They have to make estimated payments in any event.
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Do you mean "instead of making larger estimated payments"? They have to make estimated payments in any event.

If you are an employee where there is withholding, you don't have to make an estimated payments. You can accomplish it through withholding.

PSU
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This:
I am financially-minded...

is inconsistent with this:
...if there was an impact, I don't know what we'd do about it.

Don't know what you'd do, really? What do you normally do for anticipated expenses?

YG
confused
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If you are an employee where there is withholding, you don't have to make an estimated payments. You can accomplish it through withholding.

She is an employee. Not sure whether he's an employee or self-employed, but so far he's been making estimated payments, so I'm assuming he doesn't have the option of withholding.

Even in that case, it's possible that after marriage she could have enough withheld from her salary to cover taxes on their total salaries, but I'm not sure she'd want to.

Before DH & I retired, he paid quarterly, and I was salaried and had taxes withheld. I did increase both the estimated payments and the withholding to account for the marriage penalty (and other things). It never occurred to me to increase my withholding to cover all the taxes. In retrospect, that would've sent my employer the message "Look how high-income my DH is!" and there was certainly no reason to do that.
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YG,

What I meant was we aren't married yet and won't be until pretty late in the summer. I don't want to make changes like with withholding until we are actually married, and then there isn't that much of the year left.
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It never occurred to me to increase my withholding to cover all the taxes.

My wife increased her withholding to cover all the taxes.

In retrospect, that would've sent my employer the message "Look how high-income my DH is!" and there was certainly no reason to do that.

I would hope your employer would make hiring, firing and wage increase decisions based on employee productivity, not how much the spouse earns.

PSU
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What I meant was we aren't married yet and won't be until pretty late in the summer. I don't want to make changes like with withholding until we are actually married, and then there isn't that much of the year left.

You need to run the numbers, and if an adjustment up for both your withholding and his estimated taxes is needed to start now. The married or single applies for the full year, even if you are married (or divorced) on December 31.
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In retrospect, that would've sent my employer the message "Look how high-income my DH is!" and there was certainly no reason to do that.

Possibly if a small company. Most medium to large size companies employee payroll services. My management sees my salary information. They don't see payroll information.
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What I meant was we aren't married yet and won't be until pretty late in the summer. I don't want to make changes like with withholding until we are actually married, and then there isn't that much of the year left.

All the more reason to deal with the issue now rather than waiting. Do you really want to get into "See how much marriage is costing me because of your income?" while his mother his still nagging you to send his thank you notes? Since I'm under the impression (maybe incorrect) that he's got plenty of available cash now, he could boost his ES payment so that your projected joint return wouldn't make the two of you wince at the balance due. (That number varies widely by couple, but should be reached by discussion, not assumption.) This approach would leave "his" money "his" in case something goes awry. (If you're not concerned about anything going awry, I don't see the point of waiting to address the inevitable effect of marriage on taxes.

In short, things just aren't adding up here in the Peanut Gallery.

Phil
Rule Your Retirement Home Fool
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In retrospect, that would've sent my employer the message "Look how high-income my DH is!" and there was certainly no reason to do that.

Possibly if a small company...

A very small company that employed some boundary-challenged family members. No hiring/firing/wage issues, but simply a question of privacy (I like to have some).
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He's wondering if instead of paying quarterly he can just pay it all in one payment up front because of the hassle-factor of remembering and having to make the separate payments.

I'm unsure of the magnitude of the hassle. My emailer--Thunderbird--has a calendar in it that lets me set up reminders months--years--in advance. I even have an annual reminder for my property taxes.

Even Microsoft's LookOut can do this.

Eric Hines
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Each year I do the taxes. TurboTax prints out a ready made form with the taxes due quarterly, with dates. I paper clip the forms together, along with 4 envelopes, and put them in the "bill paying drawer."

Finally, I enter the four dates (well three, since the first is around April 15) into my Smartphone calendar (with alert) which chirps at me a couple days ahead of time. I unused to use Google Calendar, free, and which would send me a reminder email.

Walk to drawer, write check, stamp, mail. Yes, you could send it all at the beginning, but then sometimes things happen. Maybe you get fired and the numbers would change. Or you get a big promotion and the numbers would still change. Or you buy a house. Or...

I pay my taxes quite happily ... But never early. YMMV.
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In retrospect, that would've sent my employer the message "Look how high-income my DH is!" and there was certainly no reason to do that.
=====================================

There are lots of reasons for increase in withholding besides a spouse's wages. Rent income and capital gains are two of them. Alimony and interest income are two others.

There shouldn't be any discussion about the whys. Just turn in a new W4.

Jean
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A very small company that employed some boundary-challenged family members.

Small companies can have their unique issues.

Large companies have issues, they are just different issues.
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