Join Early Retirement Today
View Poll Results: How do determine and file your estimated taxes?
I determine estimated taxes by paying last year's tax liability 24 18.46%
I determine estimated taxes by estimating this year's liability and paying 90% 27 20.77%
I use some other method 35 26.92%
I don't need to pay estimated taxes 37 28.46%
I pay estimated taxes by check 17 13.08%
I pay estimated taxes by an electronic method, like EFTPS 46 35.38%
Multiple Choice Poll. Voters: 130. You may not vote on this poll

Reply
 
Thread Tools Search this Thread Display Modes
Old 04-11-2017, 02:09 PM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 30,514
Quote:
Originally Posted by athena53 View Post
No idea. I just looked up the form and the $50 was on Line 79, "Estimated Tax Penalty". I skimmed the IRS instructions and you're right- from what I could tell, if I had no tax liability in 2015 there should be no penalty for not making estimated payments for 2016. I'll need to look at it more closely (nearly every section on estimated payments has tougher standards for higher-income households) but TurboTax may have gotten it wrong.
Are you using TurboTax? Sometimes I've had to open Form 2210 to get them to do all the calculations.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-11-2017, 02:30 PM   #22
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 4,172
Quote:
Originally Posted by audreyh1 View Post
Are you using TurboTax? Sometimes I've had to open Form 2210 to get them to do all the calculations.
......or perhaps switched software so there may not have been carryover of previous history?
kaneohe is offline   Reply With Quote
Old 04-11-2017, 02:40 PM   #23
Moderator
sengsational's Avatar
 
Join Date: Oct 2010
Posts: 8,547
I selected "some other method". The only significant taxable income I have is when I pull from 401k or IRA. My 401k custodian requires 20% federal withholding, so I don't need to do estimated taxes. If 20% wasn't obviously "too high", I might do a pro-forma return and just tell the custodian what percent withholding I'd like.
sengsational is offline   Reply With Quote
Old 04-11-2017, 02:45 PM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 7,506
I just overpay the Fed by a few hundred. Then roll the refund into the next year's payment. Trying to keep it as simple as possible.

When RMD's kick in I'll have to start paying some state taxes.
Lsbcal is offline   Reply With Quote
Old 04-11-2017, 03:52 PM   #25
Thinks s/he gets paid by the post
 
Join Date: Jan 2008
Posts: 1,145
I normally pay the safe harbor amount unless I expect my income to drop a lot; I setup the first three quarters on EFTPS and then true up 4th quarter after I do a pro-forma return in December.
jebmke is offline   Reply With Quote
Old 04-11-2017, 03:52 PM   #26
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 22,792
I pay only state estimated taxes, not federal. The pension plan will do withholding on federal but not state since we moved to WV, which is reasonable, since it isn't realistic to expect them to calculate tax rates for the other 49 states.

The state of WV helpfully sends a form about a month before they're due so I just write a check. I use TT to calculate the amount and I've found it accurate.
__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
talk about a timely post
Old 04-11-2017, 04:00 PM   #27
Thinks s/he gets paid by the post
 
Join Date: Mar 2017
Location: New York City
Posts: 2,838
talk about a timely post

so i had my taxes prepared . i owe every year so i file late, i owe 12000 ish to the feds and 7000 ish to new york city and state, the tax guy says hey u have a 300 penalty to new york and 244 federal tax penalty, u need to send in quarterly payments,ok so i leave with 10 envelopes, 4 for ny state 4 for the feds and 1 each for the due taxes, i look over last years taxes, turns out the news was worse, i owed 18k to the feds and 9700 to the state, the penalty was almost 900, better late than never, next year the penalty should be lower if any, the money was just sitting in the check book not earning anything so this is found money, the cause was from all the interest dividends and capital gains on the mutual funds, i remember him telling me this last year, but i was so upset i had to write 2 checks for over 28,000 for taxes, i dismissed this penalty thing, didnt know it was so high,
Blue Collar Guy is offline   Reply With Quote
Old 04-11-2017, 04:31 PM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Lsbcal's Avatar
 
Join Date: May 2006
Location: west coast, hi there!
Posts: 7,506
Quote:
Originally Posted by Blue Collar Guy View Post
so i had my taxes prepared . i owe every year so i file late, i owe 12000 ish to the feds and 7000 ish to new york city and state, the tax guy says hey u have a 300 penalty to new york and 244 federal tax penalty, u need to send in quarterly payments,ok so i leave with 10 envelopes, 4 for ny state 4 for the feds and 1 each for the due taxes, i look over last years taxes, turns out the news was worse, i owed 18k to the feds and 9700 to the state, the penalty was almost 900, better late than never, next year the penalty should be lower if any, the money was just sitting in the check book not earning anything so this is found money, the cause was from all the interest dividends and capital gains on the mutual funds, i remember him telling me this last year, but i was so upset i had to write 2 checks for over 28,000 for taxes, i dismissed this penalty thing, didnt know it was so high,
At today's interest rates it is better to just overpay taxes and get a refund. Unless you have stock investments that you are sure are going to outperform the penalty amount, but that is an uncertain thing as nobody can be sure about returns.

If you are apt to forget the estimated taxes, maybe bump up your withholding a lot?
Lsbcal is offline   Reply With Quote
thank you
Old 04-11-2017, 04:35 PM   #29
Thinks s/he gets paid by the post
 
Join Date: Mar 2017
Location: New York City
Posts: 2,838
thank you

i have the remaining 6 envelopes in my checkbook with a rubber band, the bride (who is the brains of the operation) put a note on the calendar and set a reminder on her cell reminder calendar, and i agree with you ill over pay and take the refund no more major penalties for us
Blue Collar Guy is offline   Reply With Quote
Old 04-11-2017, 05:43 PM   #30
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Location: Upstate
Posts: 1,746
When I retired, I started doing estimated...but sometimes forgot when it came to the quarter dates.

Since I also get a pension, I solved the issue by increasing the withholding on it until I stopped owing at tax time (or more importantly didn't have to pay a penalty).
copyright1997reloaded is offline   Reply With Quote
Old 04-11-2017, 06:35 PM   #31
Thinks s/he gets paid by the post
 
Join Date: Dec 2014
Location: St. Charles
Posts: 2,954
This will be my first year with no W-2 income (and there is no pension, or SS right now). Last year I had some W-2 income in Jan/Feb, and then had withholding taken from my IRA distribution, which covered more than I owed. This included a chunk of cash for 2017.

I will probably take another distribution later in the year, with some withholding to cover it and an anticipated tIRA/RothIRA conversion.

Question for you experienced folks: I also have some interest and dividends coming in from the after tax account, throughout the year. Do I risk being assessed a penalty since I will only be paying later in the year, through the withholding, even though some small part of my income is earlier in the year?

FYI, for the poll I voted "some other method:.
__________________
If your not living on the edge, you're taking up too much space.
Never slow down, never grow old!
CardsFan is online now   Reply With Quote
Old 04-11-2017, 06:52 PM   #32
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 4,172
Quote:
Originally Posted by CardsFan View Post
...................................
I will probably take another distribution later in the year, with some withholding to cover it and an anticipated tIRA/RothIRA conversion.
............................ I also have some interest and dividends coming in from the after tax account, throughout the year. Do I risk being assessed a penalty since I will only be paying later in the year, through the withholding, even though some small part of my income is earlier in the year?

..................................
Provided you withhold "enough" , there should be no problem with paying later in the year. Withholding is more equal than estimated taxes.......timing matters for the estimated taxes but not for withholding (provided, of course, it is withheld in the correct yr) . Withholding is considered as being paid evenly throughout the year as is your income (unless you want to declare as lumpy).
kaneohe is offline   Reply With Quote
Old 04-11-2017, 06:54 PM   #33
Thinks s/he gets paid by the post
 
Join Date: Dec 2014
Location: St. Charles
Posts: 2,954
Thanks, I was hoping that was the case.
__________________
If your not living on the edge, you're taking up too much space.
Never slow down, never grow old!
CardsFan is online now   Reply With Quote
Old 04-11-2017, 07:06 PM   #34
gone traveling
 
Join Date: Apr 2011
Posts: 3,375
I calculate what I think our taxes will be based on income & pay them in Dec as part of the annual IRA withdrawal. It's technically same as earned income withholding.
gerntz is offline   Reply With Quote
Old 04-11-2017, 09:54 PM   #35
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 30,137
I use the annualized income installment method typically would owe no tax were it not for Roth conversions that I do each December and make an estimated payment in January. I use EFTPS to make the payment.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is online now   Reply With Quote
Old 04-12-2017, 06:54 AM   #36
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2009
Posts: 6,013
Quote:
Originally Posted by copyright1997reloaded View Post
When I retired, I started doing estimated...but sometimes forgot when it came to the quarter dates.

Since I also get a pension, I solved the issue by increasing the withholding on it until I stopped owing at tax time (or more importantly didn't have to pay a penalty).
And remember that each "quarter" is not necessarily 3 months or coincide with calendar quarters (3/31, 6/30, 9/30, and 12/31). Instead, the estimated tax quarters end 3/31, 5/31, 8/31, and 12/31, so the number of months are not 3-3-3-3 but 3-2-3-4.

This unevenness is partly the cause of why I make only 1 estimated tax payment in the 4th quarter. Besides my monthly dividend income being slightly skewed toward the end of the year, my quarterly dividends pay in months 4, 7, 10, and 12, so 2 of those payments occur in the 4th tax quarter. Then my big year-end cap gains distributions fall in that already skewed 4th tax quarter. All of this taken together results in nearly 40% of my income in that 4th tax quarter.
__________________
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
scrabbler1 is offline   Reply With Quote
Old 04-12-2017, 08:04 AM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 10,468
I use withholding from my pension to cover all taxes, Federal and State, including DW's self employment tax which would otherwise require quarterlies. I basically use the previous tax years actual plus anything unusual that I anticipate. E.G. I applied a refund from last year (due to high medical) to this year because I anticipated a substantial CG from a second house sale.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 04-12-2017, 08:12 AM   #38
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 30,514
I have the estimated tax payment due dates on my computer calendar, and I get reminders 5 days in advance.

This year I finally got brave enough to link my EFTPS account to one of my savings accounts where I set aside funds I know will be going to taxes. So I set up automatic scheduled payments for the whole year. Don't have to worry about it until next year.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 04-12-2017, 08:55 AM   #39
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 45,265
Quote:
Originally Posted by audreyh1 View Post
I have the estimated tax payment due dates on my computer calendar, and I get reminders 5 days in advance.

This year I finally got brave enough to link my EFTPS account to one of my savings accounts where I set aside funds I know will be going to taxes. So I set up automatic scheduled payments for the whole year. Don't have to worry about it until next year.
I love the way that EFTPS just takes care of that. I do check my bank account on the due date to make sure it takes the money each time, but so far so good. I have my Louisiana estimated taxes set up for automatic scheduled payments the same way.

I am so glad that you posted a number of times about EFTPS, because your posts encouraged me to finally look into it. IMO, it's one of those electronic services that actually does work just as one might wish.
__________________
Happily retired since 2009, at age 61.
W2R is online now   Reply With Quote
Old 04-12-2017, 09:49 AM   #40
Thinks s/he gets paid by the post
Gotadimple's Avatar
 
Join Date: Feb 2007
Posts: 2,214
Quote:
Originally Posted by audreyh1 View Post
I have the estimated tax payment due dates on my computer calendar, and I get reminders 5 days in advance.

This year I finally got brave enough to link my EFTPS account to one of my savings accounts where I set aside funds I know will be going to taxes. So I set up automatic scheduled payments for the whole year. Don't have to worry about it until next year.
Attagirl! Now if you use a checkbook program (i.e. Quicken, MoneyDance), set up a reminder to automatically post the payment in the register.

- Rita
__________________
Only got A dimple, would have preferred 2!
Gotadimple is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Calculating Estimated Taxes 2008, 2009 audreyh1 FIRE and Money 49 04-13-2009 02:03 PM
Estimated Taxes Fireup2020 FIRE and Money 13 06-02-2007 06:55 AM
Jan 16 - Estimated Taxes Due REWahoo FIRE and Money 24 01-15-2007 07:56 PM
Estimated taxes Arif FIRE and Money 1 07-17-2006 03:13 PM
Estimated Income Taxes due 6-15 mickeyd Other topics 7 06-13-2006 06:48 PM

» Quick Links

 
All times are GMT -6. The time now is 07:03 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.