Hi, a couple questions about estimated taxes. I know it's kind of late, but I just realized I may need to look into this.
Question #1) Was I supposed to pay estimated taxes for 2010 to avoid penalties, given this scenario? .....
In 2009, I had work income of $22K (from which taxes were automatically taken out of my paycheck). I also had $5K income from dividends. And $1K from business income (for which I did not pre-pay the tax). Being an idiot, I didn't plan ahead, and almost incurred a tax penalty because the extra $6K in income almost caused me to not pre-pay at least 90% of my tax liability for the year.
NOW.... for 2010, I will make about $14K from work income in the FIRST
6 months (taxes already taken out of paycheck). I will also make about $3K in dividends in the first 6 months. BUT in the LAST 6 months of 2010, I will have work income of $100K (from which taxes will automatically be taken out of paycheck). In the LAST 6 months of 2010, I will also have $3K in dividend income.Was I supposed to be paying estimated taxes? As I said, in 2009, I almost incurred a penalty because of the extra $6K I made in dividends/ business. But, if I read correctly, since I obviously will pay in
2010, way more than my tax liability in 2009, I won't have a penalty?Question #2) If you're calculating estimated tax payments, I know you need to consider predictable income from the previous year, such as regular dividends, since they don't automatically get taxes withdrawn. However, what if one quarter, you happen to hit the jackpot... say you buy a penny stock that skyrockets and you make a $500K profit in just a few days (this is just hypothetical). Then obviously your estimated tax for that quarter will be way off. Are you supposed to disregard the estimate for that quarter, and more precisely calculate your tax liability due to the unanticipated $500K income?
Question #3) Kind of related to question #1. So what if I realized I DID need to be paying estimated quarterly taxes. Well obviously I already missed the 1st quarter. Would I have to figure out my penalty and pay it in the 2nd quarter, or do I pretty much have to just wait passively until the end of the year and then pay one big penalty?