paying estimated tax all at once, rather than quarterly


T

tarkanian.1.rahim

would the IRS object if someone paid his estimated tax on 1099 income
all at once, in december, rather than sending in 4 quarterly checks?
 
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E

ed

The IRS never objects to what you do about estimated payments.
Underpaying is not a crime like withholding is. They just charge you
7% interest on any underpayment. If you wait until December to pay
your quarterly installments you underpaid 1/4 of that from April 15,
another quarter from June 15 and another quarter from Sept 15 until the
date paid. Why not just wait until next April to pay your taxes and
skip the installments? Whichever way you do it, it's a 7% loan. To
some people that's a pretty cheap "float". ed
 
D

D.D. Pallmer

I have my retired parents pay in 1 estimate, ahead of time. Their tax burden
is relatively low so, frankly, the few dollars in interest saved is not
worth the hassle of remembering what to send when. Giving the government a
free loan for a year on 75% of the tax due (the first payment is due in
April regardless) is the convenience fee. It's just easier to have them pay
next year's estimate when they file this year's return.
 
D

Don Priebe

Why not just wait until next April to pay your taxes
and skip the installments? Whichever way you do it, it's a 7% loan.
To some people that's a pretty cheap "float".
And they don't do a credit check!
 
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R

rick++

Figure out for yourself by computing the penalty forms
2210 2210AI. Theres two ways of computing penalties,
one which takes a lot more work and doucmentation,
but may be lower.
 

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