stepford
Thinks s/he gets paid by the post
Fairly basic question here: How accurately do I need to estimate my quarterly tax payments?
A bit more detail:
I FIRE'd at the start of this year with enough tax withheld from my final paychecks that no quarterly payments were required in 2016. I will commence my Megacorp pension in early 2017. My additional taxable income will be of two types: Predictable monthly interest and individual stock dividends, and less predictable mutual fund cap gains and dividends paid at the end of the year (plus possible Roth conversions which I will also do at the end of the year).
So my question is: Can I just withhold the tax on the "predictable" portion of my taxable income from my pension and make a single big payment at the end of the year corresponding to the tax on the "unpredictable" part? Even better would be avoid estimated taxes entirely and just pay the excess with my tax return the following April, but I think that would put me in the penalty box...
A bit more detail:
I FIRE'd at the start of this year with enough tax withheld from my final paychecks that no quarterly payments were required in 2016. I will commence my Megacorp pension in early 2017. My additional taxable income will be of two types: Predictable monthly interest and individual stock dividends, and less predictable mutual fund cap gains and dividends paid at the end of the year (plus possible Roth conversions which I will also do at the end of the year).
So my question is: Can I just withhold the tax on the "predictable" portion of my taxable income from my pension and make a single big payment at the end of the year corresponding to the tax on the "unpredictable" part? Even better would be avoid estimated taxes entirely and just pay the excess with my tax return the following April, but I think that would put me in the penalty box...