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To pay the least, and avoid penalties, have just enough withheld to cover last year's taxes (108.6% if your AGI was over $150K last year). Instead of paying installments, have your employer withhold in December just enough more to cover the above. Then pay the remainder in April with your return. If you don't pay an installment you don't have to file a Form 2210.

DO NOT TRY to use Turbo Tax nor Quicken Financial to annualize. They admit in their instructions it doesn't work properly for fluctuating incomes. There's a real annualization calculator at http://www.edcosoft.com/qitc.html. You could make one yourself by copying all the formulas on the 2210 into a spreadsheet, but the qitc one does annualization calculations for the Schedule D, 6251, high income limitations to Schedule A, and phaseouts of credits with the TMT, capital loss limitation, etc. for you. Ed



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