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Subject:  Re: 2003 Tax liability guestimate Date:  8/9/2003  4:45 PM
Author:  pills Number:  66433 of 132878

What is the best and easiest way to estimate what my tax liability will be for this year? I'm not particularly worried about having to pay additional but don't want to get into a penalty situation.

The "easiest" way is to use the safe harbor provision: pay in for taxes for 2003 what your total tax liability was for 2002. This will result in paying in a bit more, probably, than what you'll owe, but given the very low interest rates now that probably won't matter much.

If you haven't been paying enough in quarterly estimated tax payments (for April 15 and June 15 payments), then adjust withholding on DW's income to make up the difference. Estimated tax must be paid in equal and timely payments to avoid penalty; you can't make it up by paying more in the September and/or January payments.

Karl, Tax-Aide volunteer

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