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Old 04-12-2009, 11:32 AM   #41
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I am paying estimated taxes for 2009, for the first time. TurboTax divided my 2008 underpayment by 4 and printed out the estimated tax forms with that number filled in, so I blithely sent off the one for April 15th for that amount. It seems likely that I might have to pay a penalty next year, though my AGI for 2009 is difficult to estimate (too many variables).

Louisiana allows us to file our taxes up to May 15th, and I always enjoy that extra leeway and don't even think about state taxes this early. BUT - - it occurred to me this week that they probably require estimated taxes too, and mine for 2009 might be due on April 15th, and guess what? They are. So, I freaked and spent this morning doing my 2008 Louisiana taxes, paying the amount due, and tomorrow morning I will send one fourth of that amount to Louisiana for my April 15th estimated taxes. I might have to pay a penalty to Louisiana next year, as well.

(groan)

OK, so NOW my taxes are done (I think), at least until June. I feel like a battle-scarred veteran of estimated taxes by now.
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Old 04-12-2009, 11:38 AM   #42
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Originally Posted by Want2retire View Post
I am paying estimated taxes for 2009, for the first time. TurboTax divided my 2008 underpayment by 4 and printed out the estimated tax forms with that number filled in, so I blithely sent off the one for April 15th for that amount. It seems likely that I might have to pay a penalty next year, though my AGI for 2009 is difficult to estimate (too many variables).
What do you mean Turbo tax used your 2008 underpayment divided by 4 for your estimated quarterly payments? How could it do that?

Turbotax takes the prior years taxes paid (multiplied by 110% for higher income earners) and divides that by 4 to compute the current year's "safe harbor" quarterly estimated tax payments. If you pay by this schedule you will owe no penalties no matter if your income ends up being way higher.

And if you think there was a mistake and have figured out how to correct it, it's not April 15 yet and you can probably send in another payment. Not sure of the exact protocol, but I'm sure there is one!

Audrey
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Old 04-12-2009, 08:25 PM   #43
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What do you mean Turbo tax used your 2008 underpayment divided by 4 for your estimated quarterly payments? How could it do that?
I mean that it included the four filled out 2009 estimated quarterly payment forms when I told it to print out everything from my 2008 return. The amount TurboTax filled in for my quarterly payment for 2009 was 1/4 of my underpayment for 2008.

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Turbotax takes the prior years taxes paid (multiplied by 110% for higher income earners) and divides that by 4 to compute the current year's "safe harbor" quarterly estimated tax payments. If you pay by this schedule you will owe no penalties no matter if your income ends up being way higher.
That sure takes a load off my mind. Thanks. I can see why it would not just use the underpayment for someone who is retired and paying most/all their taxes via estimated quarterly payments, though in my case I suppose the reason it used the underpayment is that I am still getting W-2's with withholding.

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And if you think there was a mistake and have figured out how to correct it, it's not April 15 yet and you can probably send in another payment. Not sure of the exact protocol, but I'm sure there is one!
Earlier I did find a way to amend the quarterly payments, though I don't really know of any specific, correctable mistake. There are just a lot of unknowns here, so if the quarterly payments are not large enough then I will just have to pay the penalty.
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Old 04-12-2009, 08:50 PM   #44
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That sure takes a load off my mind. Thanks. I can see why it would not just use the underpayment for someone who is retired and paying most/all their taxes via estimated quarterly payments, though in my case I suppose the reason it used the underpayment is that I am still getting W-2's with withholding.
Oh - OK, it's taking into account the W-2 withholding. You're probably OK then if this year is close to last year. If you have more income than expected in a future quarter, you might want to refigure your estimated taxes.

Audrey
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Old 04-12-2009, 09:50 PM   #45
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Oh - OK, it's taking into account the W-2 withholding. You're probably OK then if this year is close to last year. If you have more income then expected in a future quarter, you might want to refigure your estimated taxes.

Audrey
Thanks for the tip!! That's a good idea.
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Old 04-13-2009, 08:53 AM   #46
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Oh - OK, it's taking into account the W-2 withholding. You're probably OK then if this year is close to last year. If you have more income than expected in a future quarter, you might want to refigure your estimated taxes.

Audrey
Audrey,

Why the last statement? Didn't you say earlier that TT is using last yr as the safe harbor..........if you earn more than expected, don't you have more
withholding so at the end of the yr, you're even farther into the safe harbor?
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Old 04-13-2009, 11:50 AM   #47
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Audrey,

Why the last statement? Didn't you say earlier that TT is using last yr as the safe harbor..........if you earn more than expected, don't you have more
withholding so at the end of the yr, you're even farther into the safe harbor?
Audrey knows a lot more about this than I do, but I should clarify that some, but not all of my income is subject to withholding. I claim 0 exemptions on my W-2 but the withholding still is nowhere near enough and this is why I have to do estimated quarterly taxes this year. Also everything is up in the air since I am in a state of transition right now.

In 2010, I plan to be retired and no more withholding. My income should settle down to something more predictable, too. That should solve that little oddity in my tax return.
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Old 04-13-2009, 12:12 PM   #48
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Audrey knows a lot more about this than I do, but I should clarify that some, but not all of my income is subject to withholding. I claim 0 exemptions on my W-2 but the withholding still is nowhere near enough and this is why I have to do estimated quarterly taxes this year. Also everything is up in the air since I am in a state of transition right now.

In 2010, I plan to be retired and no more withholding. My income should settle down to something more predictable, too. That should solve that little oddity in my tax return.
Not sure if you realize that you can have an additional amount withheld from your salary (at least I did this when still working), and since you will collect a fed pension, you can have taxes withheld from the monthly payment (assuming the pension is enough to cover the total tax bill). I use this to avoid having to make quarterly payments.
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Old 04-13-2009, 02:32 PM   #49
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Audrey,

Why the last statement? Didn't you say earlier that TT is using last yr as the safe harbor..........if you earn more than expected, don't you have more
withholding so at the end of the yr, you're even farther into the safe harbor?
Not if you don't have withholding. Those of us living off investments don't usually have withholding.

Audrey
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Old 04-13-2009, 03:03 PM   #50
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Not if you don't have withholding. Those of us living off investments don't usually have withholding.

Audrey
ok, that makes sense. I guess I got confused bc your comment was made to
W2R who does have withholding for now.
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