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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

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Old 04-16-2017, 01:58 PM   #61
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How the IRS determines the quarterly income is not clear in that in the case of interest and dividends they get only an annual total. It must be the one off payments that make a difference, although again how they determine when they occur in many cases is not clear. (unless for annual reporting items they divide by the number of months for each period) Again as skyline says the penalty is so small, and in general you just get a bill.
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Old 04-16-2017, 02:07 PM   #62
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Originally Posted by meierlde View Post
How the IRS determines the quarterly income is not clear in that in the case of interest and dividends they get only an annual total. It must be the one off payments that make a difference, although again how they determine when they occur in many cases is not clear. (unless for annual reporting items they divide by the number of months for each period) Again as skyline says the penalty is so small, and in general you just get a bill.
IRS does not determine the timing of the quarterly income. You do if you wish to use Sch AI of the 2210. IRS however can easily determine the timing of your quarterly tax payments and assuming income is even through the year can determine whether you have underpaid any quarterly payment.
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Old 04-16-2017, 02:23 PM   #63
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We did estimated tax payments for many years. Now that we're beginning RMD's, I'll just do a tax estimate late in the year and have an appropriate withholding amount taken from the IRA withdrawal. Seems easier than doing the estimate early in the year in order to decide on an amount for four estimated payments.

I still need to check with Schwab and find out how much notice they need to do the RMD by EOY. I'm hoping no sooner than Dec 1st.
Yeah, that's a really nice loophole to be able to withhold late in the year instead of paying estimated taxes.
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Old 04-16-2017, 02:28 PM   #64
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How the IRS determines the quarterly income is not clear in that in the case of interest and dividends they get only an annual total. It must be the one off payments that make a difference, although again how they determine when they occur in many cases is not clear. (unless for annual reporting items they divide by the number of months for each period) Again as skyline says the penalty is so small, and in general you just get a bill.
You report the quarterly timing of the income to the IRS on Form 2210, otherwise the IRS assumes your income is evenly spread out over the year. You can put whatever you want on the 2210, but if you're audited, you had better have documentation to back up what you reported.
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Old 04-16-2017, 05:06 PM   #65
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I always ignore estimated taxes, and end up paying somewhere around 1.5%-3% penalty at tax time. It's such a small penalty that I wonder why everyone puts up with the headache and effort of figuring out the estimated taxes and submitting payments on a quarterly basis.
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sounds about right if you are basing it on the penalty/tax due. If the actual rate is R, you would be paying about 2/3 R calculated your way so if R=3% as it has been for the past few yrs, you'd be paying 2% by your calculation.
Funny thing about numbers.....for me anyway........if I owe 1K and and pay 2% penalty and owe $20,it feels like 2%. If I owe 10K and pay $200 in penalties,it feels more like $200.......like real money.
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Old 04-16-2017, 05:13 PM   #66
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I've been owing tax every year in the last 4 years I was working. I might have paid $70 max on $2-3k tax. No biggie. No need to get all stressed out.
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