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Our "safe harbor" appears to be 100% of our 2001 tax obligation. (To be paid in 4 equal and timely Estimated Tax payments and no matter how much we may still owe April 2003.)

That's a combination of withholding and estimated tax payments. Thus, if your 2001 total tax was $10,000 and you've had $2,500 withheld by 3/31/2002, you don't have to make a 4/15/2002 ES payment even if you had a gabillion dollars in 2002 capital gains on 1/1/2002.

But the article also indicates -

. Each quarter stands alone, and income spikes in one quarter do not allow putting off payment of taxes due to another quarter. (I could interpret that to read that we made more money in the first quarter and therefore we owe more taxes for the first quarter than we will have paid in with the first quarter's Estimated Tax payment.)


I'm not sure what you were reading in the article, but that has no relevance to the 100% of last year's liability safe harbor. It would make a difference if you were doing annualized income for 2002, but you're not.

Questions:
. Is 100% of our 2001 tax obligation correct?


Yes. IIRC, you're 2001 AGI was under $150,000.

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?

Maybe not until 4/15/2003, depending on how your withholding for 2002 runs.

Phil Marti
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