Monday 9/16 is deadline for 3rd installment of estimated taxes. Question for anyone who knows...if my prior payments total in excess of 100% of prior year taxes, (in my case, I have already paid 125% of last year's numbers) am I still required to make a payment this Monday? This is my first year of my income coming 100% from trading so I don't have any withholding to offset these required payments.
IRS Rules state:
If you did not pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Estimated-Taxes)
I made the April 15 and June 15 payment which, as mentioned, puts me above that 100% of last year's taxes and haven't made any additional payments since. My interpretation of the above rule was that I didn't need to make any additional payments but now I am not sure. I'd really hate to have to deplete my capital to pay this if it is not necessary.
Can anyone offer a little guidance? (too late to ask accountant/tax professional since Mon is cut-off date.)
Thx
IRS Rules state:
If you did not pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Estimated-Taxes)
I made the April 15 and June 15 payment which, as mentioned, puts me above that 100% of last year's taxes and haven't made any additional payments since. My interpretation of the above rule was that I didn't need to make any additional payments but now I am not sure. I'd really hate to have to deplete my capital to pay this if it is not necessary.
Can anyone offer a little guidance? (too late to ask accountant/tax professional since Mon is cut-off date.)
Thx
