You don't have to do any of that figuring and guessing about future estimated taxes, though. If you take what you paid in taxes for the prior year, you can just pay that same amount in the current year in 4 equal installments. Then you are exempt from penalties and interest if you guess wrong. And it's sooo much easier than trying to figure out your future income and estimated tax payments from those forms and formulas. That's what I've done for over a decade (er, what my accountant does.)
If this is the first year you're paying estimated tax payments, I believe the gov gives you a pass on figuring it out with equal payments as long as you get it all paid by April 15th. But I could be wrong about that one.
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Simpler way for Estimated Tax figuring
Date: 2009-03-25 05:00 am (UTC)If this is the first year you're paying estimated tax payments, I believe the gov gives you a pass on figuring it out with equal payments as long as you get it all paid by April 15th. But I could be wrong about that one.