Message Font: Serif | Sans-Serif
No. of Recommendations: 0
KentonKelly writes (in part):

Since you've indicated that this year's tax will be substantially higher than last year's, and I'm assuming you don't want to write a huge check on 4/15/00, I'd shoot for the 90% of this year's tax. Key is get started on it now and get it accomplished by 01/15/00.

I reply:

Actually, I'd prefer writing the big check on April 17, 2000 (April 15 will be a Saturday), to making an interest-free loan to Uncle Sam, so I'd go for the safe harbor based on last year's taxes. As edcosoft frequently (and correctly) points out, if your withholding is not already enough, you can wait until your last paycheck of the year before increasing it as much as you need because, by operation of law, all withholding amounts are "deemed" to be spread evenly throughout the year.

I doubt that the annualized installment method is still available to you, because (as I understand it) it requires equal and on-time installments, so estimated taxes from this point forward are too late. In any event, I believe that the penalty is merely 8% interest, but I may be wrong about that. --Bob
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.