Would anyone disagree with this statement? Taxpayer's prior year (2012) 1040 tax was zero. Taxpayer's 2013 1040 tax is expected to be 200,000 due to the sale of a rental property. Taxpayer does not have to pay anything to IRS until he mails his tax return 4-15-14. Thanks.
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Technically
He would have to pay 110% of zero to avoid the estimated tax penalty; that's a joke.Originally posted by John of PA View Post
It wouldn't be a bad idea to at least make an effort to pay an estimated payment (out of sight, out of mind/checkbook). Also, I would Efile a return with balance due of that amount; just in case the return is lost in mail. But yes, the amount required to be paid would be zero.
Also be aware of the new Medicare tax on net investment income when calculating estimated taxes. It may or may not be a factor with your client.Circular 230 Disclosure:
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Good point, the new NII tax certainly will increase the 2013 tax liability as this is a large gain. It appears there is not an ES requirement for 2013 regardless of how much the new NII tax increase the 2013 tax liability becasue the prior year tax is zero. However for the state of PA, different story. Thanks again.Comment
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Yeah
Is that a flat tax for PA (3.07%) regardless of the income source? I've had a few clients recently with PA inheritances/estate distributions, etc and I've always thought...what an odd percentage!Originally posted by John of PA View PostCircular 230 Disclosure:
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Yes Davein thats correct, PA is a flat tax of 3.07% on all taxable income regardless of the type of income, with very little deductions allowed. The tax base is a little smaller than the Fed return, ex: pension income is not taxable. PA is what we call "de-coupled" from the Federal laws.Comment
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