Rick Merrill wrote:
- quote -

Well, no. We used vouchers then, too, and he sent in the
first one with his return. The problem was that he wrote
one check for the combined amount. IRS didn't seem to know
what to do with this.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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Lanny Williams wrote:
- quote -

Would you say that isn't supposed to happen now because of
the voucher system?

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Phisherman wrote:
- quote -

I'm not sure why the amount to send in is at question.
Estimated tax payments should NEVER be sent with the payment
for current taxes.

Some years ago, I had a client send the balance on his
current return and the first installment of his estimated
tax for the next year at the same time -- one check! It
took us two years to resolve the confusion at IRS.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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Yes, I know about inherited money not being taxable and all
that...I was mainly trying to say that I have a more
complicated situation now because of all the new income
being generated, and coming from new sources all the time.
Anyway, lets ignore for that now. My main question now
is:

Given that I know I will owe about $1500 more in taxes than
I've been paying through est. tax payments, and given that I
plan to file an extension NOW (before I go out of the
country for 2 months), and given that my estimated tax
payments sum to $500 less than my 2003 tax liability:
Should I send money in now with a FIFTH 1040-ES
(voucher)--maybe about $500..., AS WELL AS an extension form
with a separate check (about $1000, so all totaling about
$1500), or should I just do the latter (one check for
$1500).

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ov8eight[at]yahoo.com wrote:

- quote -

The estimated tax is done in 4 payments. As a guideline,
use the previous year of tax owed to divided into 4 parts.
The last payment is due January of the following year which,
when paid, must be 90% of what you owe to avoid penalty.
Usually this last payment is unequal to the other three due
to year end capital gains. The IRS wants your tax owed paid
approximately evenly over the 4 payments, but that is not
too practical. At least this is how I understand the words
of a tax accountant. I was hit one year with a penalty, so
I want to make sure that doesn't happen again. Bottom
line, send in what you owe--no more, no less.


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Inherited money is not income for tax purposes. Send in
your 2003 tax liability + more money such as $100. Then
you will not owe a penalty.

Missy Doyle

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- quote -

Money that you inherited is not taxable income. However, any
interest or other income that you earned on the inherited
money after you had it is taxable income.

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Thanks. I'm ready to send in the form, but I"m not sure how
much extra money to send in. I just read an IRS pub. that
says amount of estimated tax paid does not have to be more
than previous year's (2003) tax liability. My estimated
payments for tax year 2004 are $500 short of my 2003 tax
liability. So should I sent in $500 with the extension
form? The thing is, I'm sure I'm going to owe more tax for
2004 than 2003, but I don't know how much more (a very rough
guess is about $1000 more)...Its hard to know because of my
unique situation this year (inherited money, money coming
from trusts, etc. etc.). So should I send in $500 or $1000?

p.s. I did not make ANY estimated tax payments to New Jersey
(my state) for 2004....So I plan to send in with their
extension form my rough estimate of the tax I will owe them
for 2004.

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mytax[at]adams.net wrote:

- quote -

And some states even want to penalize refund returns. Some
also accept the 4868 (federally filed) as an automatic
extension on the state return.

[Some = California, and others.]

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<nov8eight[at]yahoo.com> wrote:

- quote -

Even with the extension you are still liable to pay the tax
on time. Otherwise there are interests and penalties.

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At the federal level there is a penalty for filing late -
the filing extention avoids that penalty; however, and
please note well:

a filing extention DOES NOT give you a payment extension

- if you think you're going to owe more than a little pocket
change you should send in another check by April 15.

Trusts can also get extentions to file, but the same
limitation applies as to payments.

For state matters, it will depend on the state - some states
automatically pick up a federal extension, some don't. To
be safe you should file an extension request with your state
as well.

If you think you're going to owe taxes to the state, the
same general rules apply - there will be a penalty for too
small estimated payments plus a penalty for late payment, so
it's better to make a payment now that you think will
reasonably cover your eventual tax liability.

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http://www.irs.gov/formspubs/lists/0,,id=97817,00.html
is the web site for forms.
You will need a form 4868 for the federal
You did not say which state you are filing. Different
states have different forms for extentions.

Missy Doyle

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Due to my travels, I'm planning to send my 1040 in late,
maybe a month late. I've been paing estimated tax, but I
may still owe a little--not sure.

One question is: I know there's a form I can fill out to
get an extension. What's the advantage to filling out this
form...is there a larger penalty if I don't? Maybe it's
just to notify IRS that they'll be getting my return, to
prevent them from writing to me and asking where it is? I
know that even if I fill out the form, I'll still own
interest on the amount due.

Is it the same situation with a Trust return (1041)?

Same for state return? In this case, I will owe the state
money this year because I neglected to pay any estimated
tax. I wonder if I should pay the est. tax NOW, if I think
I'll be sending in the state return late.

Thanks.

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