Herb Smith <smithff33[at]aol.com> wrote:
- quote -

Okay, thanks.

Kurt

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ed <edcosoft[at]sbcglobal.net> wrote:
- quote -

Okay, so I'll have her look at increasing withholding,
because she did have to pay a little bit extra but only for
about 2 months of "da biz"

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Kurt Ullman <kurtull...[at]yahoo.com> wrote:

- quote -

When her withholding will not cover the amount of the prior
year's tax, or 90% of the current year's tax (whichever is
less or these "safe harbors") she will owe a penalty for the
shortage, computed at 8% simple interest on the underpayment
for the time it was underpaid.

Unfortuantely when she discovers this inadequatacy it is too
late to avoid a penalty by paying an "installment " or
"estimated payment" so she should increase her withholding
appropriately (to meet one of the "safe harbors") because
withholding is considered paid evenly throughout the year,
but an estimate payment is not.

Note the last year's tax safe harbor has nothing to do with
how much she'll owe next April, but she's got at least 3
months to figure it out.

ed

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Kurt Ullman <kurtull...[at]yahoo.com> wrote:

- quote -

As long as her 2007 withholding is equal or greater than her
2006 tax liability, she does not have to worry about
estimated taxes this year. There would be no
underwithholding penalty.

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My daughter works full time (with withholding, etc.) but has
started up a small business on the side. Is there some
number (either specific dollars or other metric) where she
should start worrying about estimated taxes? Don't want any
nasty surprises in APril.

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