Am I safe on estimated tax payments?

Question

Because I did not have to take a minimum distribution from my IRA in

2009, low interest rates, and stock market tanking, I greatly overpaid my estimated taxes for 2009. I overpaid so much, that I elected apply a portion of my refund due for 2010 taxes. The amount was enough to match the amount of my 2009 tax liability. This year is also going to be lean, except that I do have to take an IRA distribution.

Am I in a "safe harbor"? Would thay be true for state (CA) as well as for federal estimated tax?

Bill

Arthur Kamlet · Accepted Answer

This seems right provided your 2009 AGI was under $150,000.

ed · Answer

I don't know about CA , but if your AGI was under $150K last year, you're in the safe harbor. BUT you might be in a REAL safe harbor and lower than 1/4 of last year's tax if you use the Annualized Income Method to figure the least amount you can pay in iinstallments. To maximize thiis tax deferral, be sure to include any capital loss carryover in the first quarter and wait until after Septembe 1 to take you RMD. Too bad you already prepaid all your 2010 tax. Uncle Sam can use your credit, however.

ed.

Salmon Egg · Answer

In article , ed  wrote:An AGI of less than 150K was no problem for 2009. I would happily pay my my taxes if the Government would help me break the 150K barrier.At this time of my life, I am willing to give up the small amount of interest and dividends that might be squeezed out by holding onto my money a bit more effectively. Not having to fill out the forms, even using tax preparation software, is worth a few hundred dollars to me.It really bugs me that as I grow older, the paperwork seems to get overwhelming.Bill

Am I safe on estimated tax payments?

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