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Author: FlyingDiver Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121148  
Subject: Safe harbor options? Date: 4/5/2014 11:00 AM
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We generally use the 110% previous year's tax safe harbor for paying our estimated taxes. Income has been creeping up slowly, so we're generally not too much over, and with the 10% Amazon refund bonus through TurboTax, I think we generally come out ahead on the deal.

Sometime in the next couple years I'm anticipating a one-time spike in LTCG income due to sales of highly appreciated stock. I'm figuring a tax bill that year of 3x or 4x normal.

I know I'll be safe that year due to paying 110% of previous liability, but I certainly don't want to pay 110% of the spike liability the following year. So what's the rule for the following year?

If I think it's going to be close to a normal year, I could go with 110% and it would be OK. What do I do if something unforeseen happens and I'm low? Can I fix it during the year, probably by jacking up the Q3 and Q4 payments?

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