Moemg
Gone but not forgotten
I underpaid in quarterlies last year and they fined me $20.
The fine varies by how much you owe and if it is too much the IRS are not happy about it especially if it happens more than once or twice .
I underpaid in quarterlies last year and they fined me $20.
I also had to be conservative because last year I underpaid a bit, and had more income, so if I owed again this year there'd be a penalty.
Bottom line, we started with getting back 13k in Fed and State taxes, and after SEP IRA, we are getting a whopping $15,000 - dumb!
If you had not had this inadvertantly overwithheld, what would you have done with it?
Anybody else like getting big returns? Use it despite knowing you're loaning money for free?
We got hammered pretty hard on 2007 taxes for realizing over a decade's worth of Tweedy, Browne cap gains. I keep telling myself "It's good to pay taxes, it's good to have capital gains"... It makes me feel good about the 2008 estimated taxes, too. Sure. The numbers don't lie, however-- we're saving far more on fund expenses than we paid in taxes.I owe, even with quarterly estimates.........oh well, Uncle Sam GAVE ME a loan for a few months.......
Some extraordinary things happened in 2007,not likely to be an issue in 2008.......
As I said, I had (considerably) more income last year, so it follows that I had a larger liability. Covering last years liability would've been overpaying a lot more.Not necessarily true. Check out the safe harbor clauses. I believe there is a safe harbor such that if you pay in this year at least as much as your total liability last year, you won't owe a penalty no matter how much you underpay. (It may be 110% of last year's total liability if you make "a lot" of money, I forget.)
2Cor521
Kronk,
I'm assuming you set your federal exemptions at 10. I am not an expert, but I believe it is possible to set your federal exemptions higher than 10 provided you have a reasonable basis for doing so -- and I've always thought that it seemed reasonable to have your allowances set higher if you still manage to have enough withheld to cover your taxes owed.
Many years ago, I had my federal allowances set at 14 and was still getting federal refunds. This was due to having my somewhat large and fairly regular profit sharing bonuses taxed at the top marginal rate. I never had any problems either with my employer at the time or the IRS.
Do note that the IRS can check up on you and if it determines you're trying to avoid paying your taxes (perhaps by massive deliberate underwithholding) they can force you to claim fewer allowances (even down to zero, I think), perhaps forever.
2Cor521
I never heard of "quarterlies". Is that something rich people need to do?
I never thought of it that way! Pretty funny.I've never understood this fascination so many people have with getting a 'refund'.
Geez, do these people feel 'rich' when they pay for a 95 cent item with a $20 bill instead of a $1 bill? Hey look, I just got $19.05 back, that other sucker only got 5 cents!
To make the analogy closer - also assume you had to come back a year later and fill out a form to get your change back! Sweet deal, no? <sarcasm>
-ERD50
3. You know that if you pay 100% (or 110%) of your prior year tax, then you are safe, right? That's the easiest way to calculate it.
I think they let me set it at 9 allowances -- whatever it was that you could do without getting an approval from the IRS. We only sold the business in July, so they were set at 0 for the first half of the year. This was also just a one-year thing, so it's no biggy.
I overpay every year (this year I got back $35000). It drives my accountant crazy.