Jim Foyle wrote:
- quote -

I agree, as long as the underpayment of course results in no
penalties.

This past year, 2004, I underestimated my state income
taxes and had to divy up my underpayment. Darn it! I'll
do better for this year and thereby avoid having to mail the
state a check for one dollar. But I DID come close!

ChEAr$$$$,
Harlan Lunsford, EA n LA]
13 Apr 2005
ONLY two days more!

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"Nan, EA in LA" <naneklund[at]aol.com> wrote:
- quote -

I've been mulling this point. I grossly overpaid estimated
taxes last year mainly because my taxes on Social Security
income were quite different from what I expected.

Somebody on this ng was amazed at people overpaying, which
is an interest free loan to the government, then paying a
premium to a tax preparer to get an early?!?! refund.

It seems to me to be a better strategy to pay as close as
possible, and risk erring on the side of underpayment. I
really don't see why I should be making interest free loans.

Jim

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There are several reason why you would have to or should,
make installment payments to avoid a penalty, even if you
get a refund last year. The need, and amount, to pay
installments is based on last year's tax, not how much you
overpaid last year, or if you got a refund. See form 2210
nd its instructions, or Publication 505.

ed

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NW wrote:

- quote -

Criteria is - avoidance of a penalty for NOT pre-paying the
tax. We've got clients who panic at owing and some who owe
a couple of thousand every year INCLUDING a penalty
(ballpark 6% of what's owed) and prefer it that way.

There is no law that says you have to prepay. There is a
law that says IRS can charge you a penalty for not
prepaying. We try to help clients avoid a penalty but it is
their choice - always.

Nan, EA in LA

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Quarterly payments are not mandatory, but if you underpay
there is a 6% simple interest penalty.

There is no penalty if you pay in in substantaially equal
and on time amounts 1/4 of llast year's tax (110% if last
year's AGI was over $150,000) each tax quarter, or 1/4 of
90% of this year's final tax. Getting a refund for last year
is no sure indication of this.

ed

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"NW" <nowhere[at]noplace.com> wrote:

- quote -

See IRS Publication 505.

--
Phil Marti
Clarksburg, MD

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What's the criteria for having to make quarterly tax
payments to the IRS? Is it simply due to exceeding a certain
AGI level? I was asked this question by someone who was
notified by their tax pro that they need to make quarterly
payments for 2005, yet they're receiving a refund this year.

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