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I am a bit confused about estimated tax payments. Does the gov't really care whether you've made four quarterly estimated tax payments, or simply that the tax money is paid by year-end?

I know that in theory it's supposed to be a "pay as you go" system, but in practice I don't see how they would know if I received non-salary income (e.g. stock sales, option exercises, IRA distributions) throughout the year or just in December.

In the case of stock sales, presumably they have your schedule D stating when you took your gain.

I know that in the case of earned income, for instance consulting, if you get nothing for the 1st three quarters and then in the last you get lots, you have to include a statement to that effect with your tax form or else you may get penalized. The IRS wants the quarterly tax payments to be evenly distributed, if possible, (meaning they want your money as soon as possible).

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