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Posted by ed on September 16, 2007, 3:27 am
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> 2210 has two ways of calculating the penalty, of which the
> IRS uses equal installments. The second method of
> annualized income is better for me personally because most
> of my variable income is in the final quarter. You have to
> do it both ways to find out whats best for you.
You only need one way, the AI, because it uses the Last
Year's Tax Safe Harbor if less than your annualized amount,
and if your income is higher than last year and comes late
in the year you KNOW the AI is better. Trying to estimate
full year's income to use the 90% of Current Year's Tax Safe
Harbor in advance is NOT *safe* and shouldn't be used until
the year is over. Again, if your income bunches up in
December you KNOW the AI Method will compute lower
installments in April, June and September than the 90%
(un)Safe Harbor.
ed >>
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