Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 1
. Are we just lucky to have made the bulk of income in the first quarter and won't
have to pony-up for all those taxes until it catches up with the equal and timely
payments of the later quarters?

That's exactly correct. However, if your W-2 income stops and you have to make it up with more 1099 income in later quarters it will leave you with underpayments in the first quarters. The penalty is only simple interest on the underpayments at 6%.

Maybe I'm misinterpreting, but it sounds to me like you're saying that something happening later in 2002 could upset the prior year safe harbor payments that were made in time for the 4/15/2002 ES deadline. I don't see how that could happen. Of course, if anticipated withholding didn't happen later in the year, ES payments would have to be increased to take up the slack, but the withholding could be applied to the 2002 payment schedule under the actual date rule, thus leaving the taxpayer free from penalty.

Phil Marti
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.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.