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Author: edcosoft Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120828  
Subject: Re: yet another safe harbor question Date: 9/18/2003 10:34 PM
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Said that we only had to withhold for personal income (?), the s-corp profit would be handled separatedly on our individual tax form and that tax liability could be paid at later. Does this sound right to ANYONE?

No, it's not right. As a major stockholder he is liable for his profits of S-corp as earned, not just at the end of the year, or next March when the accountant gets around to filing the 1120S (if she knows how). This is immaterial, however, because he's not withholding enough to meet the 90% of current year's tax safe harbor (including his S-corp profits), nor enough to meet the 110% of last year's tax safe harbor. If he thinks he can pay an estimate payment in January to cover it he would have to file form 2210 and Schedule AI to justify it, but that requires stating your income for each quarter which includes the S-corp profits each quarter, ergo--penalty. ed
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