Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
fleg: You don't have to worry about penalties if you paid in more this year than last year's tax UNLESS you paid less in early installments. So, unless you are going to use the Annualized Income Method paying more in later quarters is a waste of money. IF your income has a lot of stock dividends you should have been able to REDUCE your second installment. I suggest you either:
1. Go to the free H & R block tax estimater site I gave a link to in a previous comment in this thread and see if you met either the 90% of current year's tax safe harbor, or the 100% of last year's tax safe harbor (110% if your AGI was over $150K last year) in each quarter. You can carry overpayments ahead to satisfy future installments, but NOT back to cover previous shortages. Also the "within $1,000 of this year's tax" safe harbor is no good if you paid any installments. This might work for you because you can use the post-May 6 rates for all your installments with these "safe harbors".
OR, 2. Use the QITC link for a similar free full year estimater to do the same thing,
OR, 3. Use the QITC link for a Annualized Income Method calculator. This might be better for you because your income increased in later quarters. But when using this method (now to figure it, or with your return next April) you'll have to use the pre-May6 rates and rules for the first installment because the law wasn't passed when your first installment was due. If you underpaid the first installment there is nothing you can do about it now except to increase withholding which is usally averaged over all 4 quarters. You can compute the first instalment free, but must register ($18) your demonstrator to compute the 2nd, 3rd and 4th installments.
I strongly suggest you at least get a form 2210 and Schedule AI and instructions from the www.irs.gov web site and read and understand how this works. The 2100AI will be quite different this year (and won't be published until December) and maybe the IRS will overlook this quirk in the first quarter requirements, but it's too late for you to adjust now anyway and it balances out with the 2nd installment.
So, if you have paid in more than last year's tax already reduce your September installment so that with withholding you paid a total of no more than 3/4 of last year's tax. good luck ed
Print the post  

Announcements

Disclaimer:
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.