vaporjeff[at]yahoo.com (Jeff) wrote:

- quote -

Jeff

If you income keeps going up, continue to do this. If your income
starte\s to drop, switch to the annualized Income Method. See IRS
form 2210 for how this works. Ed

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vaporjeff[at]yahoo.com (Jeff) wrote:

- quote -

If you income keeps going up, continue to do this. If your income
starte\s to drop, switch to the annualized Income Method. See IRS
form 2210 for how this works. Ed

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vaporjeff[at]yahoo.com (Jeff) wrote:

- quote -


Jeff: It's a nice idea to set aside enough to pay the taxes on your
business, but you really DON'T have to give it to Uncle Sam NOW.
Don't be misled by 1040ES. Read form 2210 instead, which is where
they penalize you for any underpaying. Just increase your
WITHHOLDING enough so you will have paid in 2004 as much as your total
taxes were in 2003 (110% of 2003 taxes if your AGI in 2003 was more
than $!50,000). This meets the "prior year taxes Safe Harbor" and
there wil be no penalty when you pay the remainder with your return
in April 2005.

If your income is constantly increasing each year, use the above
method. If you can't withhold that much, pay 4 equal and on time
installments in conjunction with yourr Withholding to meet the prior
year's tax Safe Harbor.

If your total income starts to drop (below the prior year's income)
shift to the Annualized Income method top compute your installments to
pay in addition to your Withholding. These installments do NOT have
to be equal. ed

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vaporjeff[at]yahoo.com (Jeff) posted:

- quote -

The important thing is that you have realized you will owe
additional taxes. Any steps you take to comply with
"timely" payment will _probably insulate you from penalties.

Keep in mind that you have a safe haven, if you have paid
110% of your total tax bill from last year. So you could
immediately request an increase in withholding from your
primary employer, aimed at achieving that amount of
withholding.

But you can also file the 1040-ES, and enclose a payment for
any amount you elect -- immediately -- and designate that as
the June 15 payment. Then, make your Sep 15 and Jan 15
payments in good time. The combined effect will be a
demonstration of your "intent to comply" and should suffice.

For example, an immediate payment of $3,000 followed by
timely $3,000 payments in Sep and Jan, would presumably
bring your total tax payments to within $1,000 of the total
due. That would certainly avoid penalties, and would have
the added benefit of reducing the size of the check due with
your filing for 2004 taxes.

Bill

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vaporjeff[at]yahoo.com (Jeff) wrote:

- quote -

Send in $5K now with the June form 1040ES and the $2500 each
in Sept and Jan.

Missy Doyle

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vaporjeff[at]yahoo.com (Jeff) wrote:

- quote -

Don/t make ANY estimated tax payments. Just increase your
withholding (from your regular job) so that withholding is
equal to or more than your tax liability from 2003. That
"safe harbor" will avoid any under withholding penalty. Pay
the balance of the tax due when you file.

You can start making estimated tax payments in 2005.

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vaporjeff[at]yahoo.com (Jeff) writes:

- quote -

Perhaps you misunderstand the form. All you need do is have
paid in as much as was you prior year's tax (112% if your
adjusted gross income exceeded $150,000), 90% of what will
be your current year's tax, or owe less than $1,000 on the
bottom line of this year's tax return. When figuring what
you NEED to pay in, look to the bottom line of last year's
return. Supplement what your current employer is taking of
your pay with enough to make up the difference between last
year's liability and this year's liability. You may not
have to be bothered filing quarterly returns. You can even
ask your employer hold additional money from your pay to
make up the difference.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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Jeff wrote:

- quote -

To answer the same question twice in one day........ Yes, go
ahead now and send in the April and June payment . If your
state also has an income tax, don't forget them as well.

ChEAr$,
Harlan Lunsford, EA n LA

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- quote -

Since it's now July, I would suggest you sent the $5000
payment NOW and the $2500 payments when due in Sept. & Jan.

Kate, EA in PA

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Figuring out taxes humble me.

I have a regular 9-5 job. In addition to that, last fall I
started a small software company (sole propriatorship).
When I paid my 2003 taxes this spring, I owed an additional
$900 (I would usually get a $1,500 refund).

I did not expect my little company to take off, but it has.
After filling out From 1040-ES today, it looks like I will
owe an additional $10,000 when I pay my 2004 taxes.

According to FORM 1040-ES, I'm supposed to make quarterly
payments on April 15, June 15, Sept 15, and Jan 15.

Since it's now July, should I just make $5,000 payments on
Sept 15 and Jan 15 or should I send in $5,000 late for April
15 and June 15 and then follow up with $2,500 on Sept 15 and
Jan 15?

Thanks,

Jeff

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