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Posted by dpb on January 1, 2008, 9:10 pm
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Went to instructions for 1040 to check on the requirements for paying
estimates in order to avoid penalty.
The wording is confusing to me -- the exception has words to the effect
of no penalty if paid 110% (non-farmer) on time and then a clause
concerning gross income on '06 form. It seems to imply the exception
only applies for incomes that previously exceeded that limit--is that
really so?
Question arises in an advisor to self-employed son advised him to not
pay estimated's this year because, as I understand it, his last year's
liability was so little. This year he has a decent (~$50k) gross but
has a cash flow problem at the moment. I was suggesting he should make
an estimated fourth quarter that was 110% to avoid penalty but now I'm
not sure that would have any effect????
Does this cover self-empolyment portion as well as income as well?
I'm the farmer and have paid estimated's all along, so this is a new
arena to me...
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