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[fizmath]

I suspect that I might end up with a tax debt over $1000 for this year which means I get penalized.  I had a few extra part time jobs and not enough money was deducted.  Also, I will get less of a student loan interest deduction. 

Can I just send extra money to the IRS before the end of this calendar year?  I visited the EFTPS website and became confused.  Most of the information seems geared to the self-employed who are sending money on a quarterly basis.  I was asked what tax form I would be using.  There was no option for the 1040A which I have used in the past. After choosing form 1040 I am then given a few other options, namely:

Please select a Tax Type:  Tax Type
The payment due information, such as a Federal Tax Deposit for businesses or an Estimated Tax Payment for individuals. This is the type of tax you are paying. The options shown here are those available for the Tax Form you selected above.

- Estimated 1040ES 
 -Payment with Return, Notice, or Installment Agreement 
 -Pmt on an amended return 1040X 
- Extension 
 -UnderReporter CP2000 
- Audit Adjustment 


If I try to send them money, then what option should I choose?  1040ES?  If I do this, will I have to fill out this 1040ES form and send it along with my tax return in the spring?

How big is the penalty?  If I owe $1400 then how much do you think the penalty would be?  I am tempted to think the penalty would be easier than dealing with this hassle or having to pay a professional tax preparer.

[ls410]

I paid estimated taxes in grad school because my stipend was not taxed at all.  I've never had to pay them because I wasn't taxed enough.

There is a schedule that must be followed.  You figure up your total tax burden and pay it in fourths.  The checks are due by a certain day each quarter and penalties are applied if you are late.  At this point in the year you've missed 3 of the payments so you might have a lot of penalities already.  Does the IRS staff its 800 number tax help line all year?  I've gotten some good advice there.  Do you file electronically?  I don't know if the programs figure up things like penalities (I use TaxAct from the IRS list of free providers and have been happy).

[prytania3]

When you say $1000, do you mean you will owe $1000 more in taxes? Or you're making an extra $1000.

Either way, I don't think you will have a penalty as long as you pay it before the April 13th. I don't believe it's enough to fool with estimating taxes, but I'm not looking at my tax book either.

[antiphon1]

As long as you pay the amount owed on or before the filing date, you aren't penalized.  That's the point of estimates.  You pay based on your income from the previous year.  Taxes on any income over the amount estimated is paid when you file your return. 

[prytania3]

I meant APril 15th.

[onthefringe]

I paid estimated taxes as a grad student, as my university wouldn't do withholding on fellowships. I sent in a 1040ES every quarter.

In many cases taxpayers get one "freebie" year of underestimating their withholding before penalties kick in. According to the IRS:

"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."

So, if your withholdings for this year are at least as much as you owed in taxes last year, you are in the clear. Also, it looks like the penalty is in the neighborhood of 2.5%. So on a $1400 underpayment you are looking at less than $50 even if you do get penalized.

[fizmath]

I paid estimated taxes as a grad student, as my university wouldn't do withholding on fellowships. I sent in a 1040ES every quarter.

In many cases taxpayers get one "freebie" year of underestimating their withholding before penalties kick in. According to the IRS:

"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."

So, if your withholdings for this year are at least as much as you owed in taxes last year, you are in the clear. Also, it looks like the penalty is in the neighborhood of 2.5%. So on a $1400 underpayment you are looking at less than $50 even if you do get penalized.

OK, that would be the situation I am in.  Withholding for this year will definitely be larger than last year. 

Pry,

I made an additional $5000 this year and think the underpayment will exceed $1000.  The tax bill last year was about $6000. 

[scampster]

Through some stupid ass move on the part of the HR department here, they withheld less from me last year than they had the year before, although I hadn't changed a thing and I ended up owing 2k. I don't believe there were any penalties attached to that, but man did finding that out suck.

[clean]

I make sure that this is done:

"100% of the tax shown on the return for the prior year,"

Also, I have extra withheld from my primary job.  (Adjust your w4)  Will you be paid again THIS year (before 12/31?  If so, change your W4 and have some extra taken out so that you are not under withholding