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I am a little confused on one point. I thought that once you selected either: Method (1) 100% of last years taxes; or Method (2) 90% of current year's taxes -- you are stuck with FIXED quarterly payments using whatever method you initially selected. In other words, I did not think you could adjust/ manipulate your SE payments?

(I said earlier)Sure you can. Each quarter can be a different amount.

I should add that the annualized installment method worksheet caps the required payment at the 100/110% of prior year's tax on a cumulative basis, with a required catch-up.

Example: Using current income, with the AI method, you calculate 1st quarter at a low amount.

For 2nd quarter, income picks up;
using the AI method, your lower required payment may well be:

(50% of prior year's tax) MINUS-(1st quarter amount, based on current income)

And there's still no penalty doing it that way.


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