I anticipate having a big AGI in 2014. If I pay 110% of my 2013 tax, will I avoid underpayment penalty?-Pete
There are several safe-harbors, but I think 110% estimated tax paid is always safe. That's what I do.
Hey Pete, If I pay 110% of my 2013 tax, will I avoid underpayment penalty?Yes ... if you pay 110& of your 2013 tax liability. You will qualify under the safe harbor provisions. IIRC, I believe you can pay less than 110% in 2014. I believe the IRS allows that if you paid in 2014 at least the amount you had withheld in 2013 you will qualify and avoid an underpayment penalty. If perchance I'm wrong, I'm sure the tax pro's will weigh in.RichArizona
s/b Yes ... if you pay 110% of your 2013 tax liability.
Hey Pete,One more thing to note: if your income exceeds $150,000 per year, then the rule is slightly different, and you should ensure you pay 110% of last year’s taxes to avoid penalties.RichArizona
110% of last year's tax liability is a FEDERAL safe harbor. Check your state safe harbors.
110% of last year's tax liability is a FEDERAL safe harbor. Check your state safe harbors.vkg, thanks for the suggestion.
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