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Phil said:Maybe I'm misinterpreting, but it sounds to me like you're saying that
something happening later in 2002 could upset the prior year safe harbor
payments that were made in time for the 4/15/2002 ES deadline. I don't see
how that could happen. Of course, if anticipated withholding didn't happen
later in the year, ES payments would have to be increased to take up the
slack, but the withholding could be applied to the 2002 payment schedule
under the actual date rule, thus leaving the taxpayer free from penalty.

Phil: Presume safe harbor for prior year is $10,000 and he's making 4 equal and on time installments of $1,000 each depending on $6,000 of withholding later in the year and using the Short Method. If he loses his job and has to pay installments in June, Sept and/or next January of $6,000 he's short on the first installment. Also, you can't use the actual date rule with the Short Method and the problem I posed was no withholding because he lost his job and had to free lance on 1099 income. Shifting to the Regular Method he's still short in the first quarter and using the AI Method is no help with large first quarter income. ed
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