RunningBum
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jun 18, 2007
- Messages
- 13,262
The penalty for underpayments is not that stiff, just 6%.
https://www.irs.gov/newsroom/irs-an...rate-applies-to-most-taxpayers-starting-oct-1
It also means you have to fill out form 2210, which requires you to specify income by quarter. Deductions too, if you itemize. You may also have to fill out 2210 if you make uneven quarterly estimated payments. If your income matches that pattern you'll avoid penalties but you still have to do the form.
I avoid this by making even quarterly estimated payments up to safe harbor, which works even if my income is uneven and/or higher than expected.
If you're going to do the withholding method from a tIRA, be aware that if you aren't 59.5 you'll be penalized for an early IRA withdrawal unless you've found an exception for that.
https://www.irs.gov/newsroom/irs-an...rate-applies-to-most-taxpayers-starting-oct-1
It also means you have to fill out form 2210, which requires you to specify income by quarter. Deductions too, if you itemize. You may also have to fill out 2210 if you make uneven quarterly estimated payments. If your income matches that pattern you'll avoid penalties but you still have to do the form.
I avoid this by making even quarterly estimated payments up to safe harbor, which works even if my income is uneven and/or higher than expected.
If you're going to do the withholding method from a tIRA, be aware that if you aren't 59.5 you'll be penalized for an early IRA withdrawal unless you've found an exception for that.