On Apr 8, 8:02*pm, Bill Brown <brow...[at]longwood.edu> wrote:
- quote -

Ed, if I could kill this post I would. I apologize again.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Apr 8, 5:37*pm, ed <edcos...[at]sbcglobal.net> wrote:

- quote -

C***. You are correct. I cannot read. I apologize.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Apr 8, 3:56*pm, Barry Margolin <bar...[at]alum.mit.edu> wrote:
- quote -

And your penalty would be zero whether your paid that $9,000 with
withholding or with equal quarterly estimated payments.

Aside to ed: Please continue to have your clients pay too much
underestimated tax penalty. Maybe you'll do enough of them for class
action status to be granted when you're sued.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Apr 8, 12:48*pm, Bill Brown <brow...[at]longwood.edu> wrote:
- quote -

No, just you are wrong. GIGO. You didn't read the original post and
nowhere are actual tax amounts mentioned so I don't know where
you got your examples, but it's wrong for this problem. If, in your
example the $19,068 was LAST YEAR'S tax ( as it was in kDukes OP)
your example is wrong, isn't it? Look at Barry's comments following.
He can
see why I'm right. Maybe if you re-read the OP and mine again it will
become clear to you also. And thank you Barry and LoTax for your
confidence. Duke thought the safe harbor was 90% of last year.
He never mentioned current year so it must have been greater than last
year.
Anyway the math is on last year's correct amount based on Duke's
statement.

ed
- quote -

<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

In article
<b9020fee-b949-44ba-891d-de4c9dd09d53[at]2g2000hsn.googlegroups.com> ,
Bill Brown <brownwp[at]longwood.edu> wrote:

- quote -

We're talking about LAST YEAR's tax liability. The 90% requirement
applies to THIS year's liability.

Suppose your tax last year was $10,000, this year it's $15,000, and your
withholding+estimated is $8,000. Your required payments is 100% of
$10K, because this is lower than 90% of $15K, so your underpayment is
$2K.

If it were the other way around, where last year's tax was $15K and this
year's is $10K, your required payments would be $9K, so your
underpayment would be only $1K.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Apr 8, 1:35*pm, Bill Brown <brow...[at]longwood.edu> wrote:
- quote -

By the way, if I'm wrong, then so is ProSeries 2007. That software
yields an underpayment penalty of $5 with these facts:
Tax liability = $19,668
Total estimated payments (equal in amount and on time) = $17,600
Total underpayment = $2,068
Required payments (line 10 of Form 2210) = $17,701
Amount upon which the penalty is computed (line 14) = $101
Penalty (line 15) = $5

Yes, simple arithmetic.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Apr 8, 12:38*am, ed <edcos...[at]sbcglobal.net> wrote:


- quote -

No, it has to be 90%. As long as the quarterly estimated deposits are
equal in amount, paid on time and add up to at least 90% of the tax
liability then the penalty is zero.

If you work through an example using Form 2210 and follow the
instructions you will see your error.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Apr 7, 6:25*pm, Bill Brown <brow...[at]longwood.edu> wrote:
- quote -

100% so he missed it by 10.05%, not .05%. He figured the underpayment
would be $20 on .05%, and the penalty they'd be writing him for would
be $1.. 10% is 200 times .05 so his underpayment is 200 times $20,
plus $20 or $4,020. Using the short method for 2007 of .0505 times
the underpayment of $4,020 is a penalty of $203.01.

ed

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Apr 7, 6:25*pm, Bill Brown <brow...[at]longwood.edu> wrote:
- quote -

am correct in both. If my math is off, let me know what you think it
shoud be.

ed3

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Apr 7, 4:14*pm, LoTax <lo...[at]hotmail.com> wrote I went to ed2, and missed ed1. *Sorry; my confusion.
- quote -

It isn't clear to me from "ed2" that ed understands he was mistaken in
"ed1."

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Apr 6, 1:58Â*pm, Bill Brown <brow...[at]longwood.edu> wrote:
- quote -


I'm unable to comment on ed1, about the $4,000 and the $200.

I think ed2: "The penalty is on the full amount of
underwithholding which IS the amount under the Safe Harbor." is
correct, at the second post by ed, "ed2".

========================================= MODERATOR'S COMMENT:
Please delete all unnecessary text from the prior post when responding.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Apr 6, 12:23Â*pm, LoTax <lo...[at]hotmail.com> wrote:
- quote -

Ed said, "So you missed it by 10.05% , not .05%.. If ..05% = $20,
then 10.05% = $4,020 and the letter will be asking you for about $200"
which, if Form 2210 and related instructions are to be believed, is
incorrect.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Apr 5, 10:22�pm, Bill Brown <brow...[at]longwood.edu> wrote:
- quote -

I think ed is correct; read again?

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

Ed and Seth are mistaken.

Duke, Barry and I are correct.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

In article
<d6f33feb-8523-44f7-b2d4-6341a4b8084a[at]y21g2000hsf.googlegroups.com> ,
ed <edcosoft[at]sbcglobal.net> wrote:

- quote -

Except I think the OP has the safe harbor rule wrong. It's 100% of last
year's tax, 90% of this year's tax, or this year's tax - $1,000,
whichever is lowest.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Apr 3, 1:56*pm, se...[at]panix.com (Seth) wrote:
- quote -

underwithholding which IS the amount under the Safe Harbor. Read
form 2210.

ed

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

In article <b33334bb-f982-4b86-afdb-c739161101ca[at]m73g2000hsh.googlegroups.com> ,
Duke of Hazard <squash[at]peoriadesignweb.com> wrote:
- quote -

The penalty (and interest) is on the full amount of underwithholding,
not just the amount below the safe harbor.

Seth

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Apr 3, 12:56*am, Duke of Hazard <squ...[at]peoriadesignweb.com> wrote:
- quote -

underpaying THIS YEAR'S tax (2007) you mjust withhold at least 90% of
THIS YEAR'S tax (2007), or 100% of last year's tax (2006) (unless your
AGI last year was over $150K). So you missed it by 10.05% , not .
05%.. If ..05% = $20, then 10.05% = $4,020 and the letter will be
asking you for about $200.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Apr 3, 1:56*am, Duke of Hazard <squ...[at]peoriadesignweb.com> wrote:
- quote -

Maybe but probably not.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

If I understand correcectly, one owes a penalty if one has less than
90% of your last year's tax withheld. In my situation, I had 89.95 %
of my 2006 tax withheld this year. I was just short $20 . Will the IRS
computers still send me a letter in a few months asking for the < $1
penalty ?

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >