On Jan 1, 8:10*pm, dpb <n...[at]non.net> wrote:
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First, the 110% applies only if his AGI was over $150K last year. If
\he pays this yer the amount of his taxes last year, in equal
installments or more, he wount incur a penalty.. It isn't that the
110% only applies, it's that you wouldn't pay that much if your income
(taxes) is less than last year.

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This year, (2008) he should pay in 1/4 of l2007 total taxes each
quarter.
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Yes includ SE tax in last year's total tax, and it covers your
installment liability for all taxes in 2008 inluding SE tax.

ed
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Went to instructions for 1040 to check on the requirements for paying
estimates in order to avoid penalty.

The wording is confusing to me -- the exception has words to the effect
of no penalty if paid 110% (non-farmer) on time and then a clause
concerning gross income on '06 form. It seems to imply the exception
only applies for incomes that previously exceeded that limit--is that
really so?

Question arises in an advisor to self-employed son advised him to not
pay estimated's this year because, as I understand it, his last year's
liability was so little. This year he has a decent (~$50k) gross but
has a cash flow problem at the moment. I was suggesting he should make
an estimated fourth quarter that was 110% to avoid penalty but now I'm
not sure that would have any effect????

Does this cover self-empolyment portion as well as income as well?

I'm the farmer and have paid estimated's all along, so this is a new
arena to me...

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<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >