On Apr 12, 3:42*pm, joetaxpayer <joetaxpa...[at]nospam.com> wrote:
- quote -

I understood that. I think you missed my point. I said
"making adjustments" -- plural. That is, make periodic
adjustments, either as gains are realized or once or twice
during the year.

The advantage is: withholding is presumed to be evenly
distributed throughout the year, even if it is not. So you
know if you have covered your tax liability without risk of
penalty as long as you have withheld enough by the end
of the year.

If you try to make the same adjustments by making
uneven estimated tax payments, the annualization
computation is more complicated, and you risk a penalty
in one payment period or another, even if your payments
cover your total tax liability.

Of course, if you don't have sufficient income subject to
withholding, you have no choice but to make estimated
tax payments.

--
<< ------------------------------------------------------- > << 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
<62af0529-ea8c-43ba-a931-867a58e3533a[at]a1g2000hsb.googlegroups.com> ,
"rick++" <rick303[at]hotmail.com> wrote:

- quote -

Not really. For me, and maybe others, the largest unknown was the
amount of income I might receive in the coming year which might include
unexpected capital gains, a large amount of overtime pay, bonuses (which
are supposed to have extra withholding but still cause problems) and
other variable income. When that is coupled with the same variables in
my wife's pay, then the small change in tax brackets and rates were
almost lost in the noise when compared to the volatility of our income.

I still believe the safest course is to withhold and/or pay estimated
tax to the safe harbor and then not worry about it - either pay up taxes
due (interest free loan to me) or receive a refund (interest free loan
to the gov.) next year.

--
-Ernie-

--
<< ------------------------------------------------------- > << 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 13, 3:06*pm, "rick++" <rick...[at]hotmail.com> wrote:
- quote -

Rick. 2008 tax rates have been available since late 2007, along with
all the phase-out constants. It's just that TT does';t have them.
Using 2007 TT the way you are is bad news if you are in AMT land, and
as you know is using 2007 rates and constants. Why not just get a
real 2210 tax calculator downloaded from the web and do it right.

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

- quote -

Its only "estimated" because the 2008 tax brackets wont
be set for another 6 months. Most likely they will be more generous
than now due to inflation. Otherwise you can compute your
necessary tax exactly according to 2007 tax laws.

I use my $15 TurboTax program to compute a column of
2210 penalty form- each quarter. Essentially
you print your paycheck and every income producing account
on April 1, June 1, Sept 1 and Jan 1 and ype this into the 2210.
If your broker breaks out the long term gains and dividend parts,
Turbos Tax handles this too. If the 2210 shows a tax deficiency,
I round up the deficent amount to the nearest hundred and
debit that to my electronic IRS account.
Be sure to update your 2210 with the paid estimate,
so you are ready for the next quarter.
The only problem with Turbo Tax is I cant feed a 2007 tax return
into a 2007 2210 form (only accepts a 2006 tax return).
So I have to override those numbers with control-R on the 2210.
Should I get a penalty-due letter from the IRS, I have
seend them my 2210 then to delete it (and they do so).

If you receive most of your untaxed income early in the year,
you keep your money longer if you use the equal-quarters method
of computing the 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. > << ------------------------------------------------------- >

On Sat, 12 Apr 2008 16:59:11 EDT, PeterL <po.ning[at]gmail.com> wrote:

- quote -

I believe that if you pay, in estimated and withheld taxes, an amount equal
to 100% (or 110% if your income is over $150K filing jointly) of your taxes
from this year, you will owe no penalty.

So just see what you've paid for 2007, and ask your employer to increase
your withholding by an amount sufficient to reach that number. You'd
probably file a new W4.
--ron

--
<< ------------------------------------------------------- > << 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 12, 6:42*pm, joetaxpayer <joetaxpa...[at]nospam.com> wrote:
- quote -

Quarterly Installment tax calculator which you can download from the
web. This works particularly well for you when your gains are
distributions from mutual funds at year end. It computes the exact
installment necessary for each quarter without overpaying just because
of a mid-year gain.

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

joeu2004 wrote:
- quote -

OP's issue was not knowing what his gains would be. So I see a few choices:
1) Pay the 'insignificant' penalty. If indeed it's that small, it may
not be worth the effort to follow my next choices. "gee, honey, I messed
up again, let's go shopping" should work for SWMBO.
2) Adjust withholdings to pay too much, e.g. plan to refund $2,000
instead of owing $2,000. Not recommended, but one way out.
3) Track gains and taxes through the year. Year to year changes are
minimal (the tax rates, and exemptions, I mean) so using 07 TurboTax
will at least narrow things down. As you see the tax due and penalty, a
quarterly payment can be made.

Joe

--
<< ------------------------------------------------------- > << 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 12, 1:59*pm, PeterL <po.n...[at]gmail.com> wrote:
- quote -

Since you have wage income, you might be able to avoid
making estimated tax payments simply by making
adjustments to your withholding.

I simply estimate my total tax liability, using all of the same
information that goes into a 1040; then I use the withholding
tables to determine the number of allowances to withhold the
right amount by the end of the year.

--
<< ------------------------------------------------------- > << 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
<8b5449ec-9d9c-4755-8cf6-b97946ea2f04[at]p39g2000prm.googlegroups.com> ,
PeterL <po.ning[at]gmail.com> wrote:

- quote -

One never knows for sure, that's why it is "estimated". I give it my
best guess and round up a bit so that I will be sure to pay 110% of the
previous years taxes (safe harbor amount), based on previous years
taxes. If you do have unexpected income in a given quarter or have a
lower than expected withholding, so that you will not fall under the
safe harbor, you can always increase the amount of estimated payment for
that quarter, but if you do that, be sure to file a 2210 form
(Annualized income installment method) to avoid any penalty for nat
making equal payments.

--
-Ernie-

--
<< ------------------------------------------------------- > << 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
<8b5449ec-9d9c-4755-8cf6-b97946ea2f04[at]p39g2000prm.googlegroups.com> ,
PeterL <po.ning[at]gmail.com> wrote:

- quote -

If these are mutual funds, they will often notify shareholders if they
expect to be making unusually large capital gain distributions at the
end of the year. If they don't warn you proactively, you can call them
a few weeks before their usual distribution dates, and ask them for an
estimate.

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

Once again I find myself owing a significant amount to the IRS, mainly
because I didn't pay estimate tax. I have a regular income where
taxes are withheld. I also have significant but irregular capital
gains and taxable interests. I don't mind paying the penalty, which
is insignificant. But wifey don't want to.

So for next year, how can I go about paying estimate tax, not knowing
what my capital gains will likely be?

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