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You can always use the Annualized Income method for paying your estimated taxes. It's a bit more complicated than dividing last year's tax by 4, but not that bad.

The gist of it is that just before you make each estimate payment you look at your taxable income so far. Your estimate payment is then based on that income alone. That way, a surprise distribution from your mutual funds in December won't be penalized, as long as you make the increased estimate in the following January.

For all the nitty-gritty details, I'd suggest you head over to the Tax Strategies board and ask your question there. You should get the attention of edcosoft who is the resident guru on the annualized income estimates. If you want to do a little reading on your own, take a look at form 2210, schedule AI.

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