Announcement

Collapse
No announcement yet.

Estimated tax Underpayment Penalties

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Estimated tax Underpayment Penalties

    Can the annualized income be used to calculate the estimated taxes for the first three quarters and then use the previous tax year at 110% be used for the final quarter to determine the penalty forgiveness for underpayment of estimated payments, or must either one or the other be used. Therefore, requiring a full payment if the expected tax liability increases way beyond the 110% for the final quarter?

    #2
    The annualized income method on the page 4 of the 2210 calculates the required installment for any quarter as the lesser of 90% (or 110%) of the actual annualized income for that quarter or the annualized income based on the previous year for that quarter. So when you fill out that worksheet, I think you will find that it is already going back and forth between the lesser of the two installments for any particular quarter.
    Last edited by Bees Knees; 01-16-2006, 07:42 PM.

    Comment

    Working...
    X