Thanks to all who have replied, both via email and here.
All told, I've decided to consult a local CPA.

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michaell...[at]hotmail.com wrote:

- quote -

NO. The mortgage interest is after a 7 1/2% of AGI
deductible and then must be more than your Standard
Deduction (which you don't say ) to be worth while. The
better "safe Harbor" is that your withholding be as much as
your prior year's taxes. That waives any penalty and you
can pay the rest in April with your return. If your
withholding in 2006 was less than last year's tax the
penalty is only about 5 1/4% on the deficiency, but if you
make up that difference before April 15 the penalty is
reduced by .022% per day ( that's 8% annually simple
interest ).

ed

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<michaelloll[at]hotmail.com> wrote:

- quote -

I really don't know what "normal taxes withheld" means

However, you can adjust your withholding by claiming fewer
or more exemptions

When you have self employment income you also need to
account for the self employment taxes

The safe harbor for avoiding a penalty for underpayment of
estimated tax is the lesser of 90% of current year, or
100/110% of the previous year - that depends on your agi
amount

.... and don't forget about the state tax on your income

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] > > -----> real address on hobokeni or hobokenx <-----

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I had a question about paying estimated taxes. Here is my
situation, basically, I expect to make an extra $5000-10,000
this year in self employment income, on top of my regular
salaried income from my job. I'd rather not have to bother
filing estimated taxes. My understanding of estimated taxes
and the safe harbour provision is that if I can cover 90% of
my taxes through my salary, I should be fine and not have to
pay estimated taxes (or a penalty for not paying them).

I will have a deduction in 2007 of roughly $16,000-17,000
for my mortgage interest. That is my biggest deduction.
So, is the following scenario safe? I'll use rounded
numbers to make things easy.

Income: $50,000 (normal taxes withheld)
Self employment income: $10,000
Total income: $60,000
Deduction: $15,000 (house interest)

So given this scenario, as long as my extra income doesn't
go above my deductions, I should be fine, right? Taking
into account that I'll pay the extra self employment taxes
too, so I can't quite make a one for one match between my
deductions and my extra income.

Make sense?

--
Mike

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >