Wednesday, February 02, 2005

[info] Estimated tax payments

This is what I gathered from combing through

The required estimated tax payment for the year, is the lesser of:

a) 90% of your current year tax obligation, or
b) 100% of your last year's tax due, or, 110% of your last year's tax due if your adjusted gross income exceeded $150K.

So to be safe, best to look at your last year's tax return, and go with option (b) to avoid penalty.

Since the government wants your money early, they want you to pay through out the year. If you don't pay the correct amount, you get penalized for underpayment.

I am still trying to understand the underpayment situation (Form 2210). More to that later.