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Self Withholding

I was greatly underwithheld on my 2011 taxes due to unexpected quarterly dividend payments (corporate bonds) for which the payer did not withhold taxes. I will receive similar dividends this year (2012), and will be similarly underwithheld because I have not adjusted my W2. My 2012 tax liabilty will exceed both my 2011 tax liability, and 90% of my 2012 withholding.

I have contacted my dividend payer and they no longer withhold taxes. What is the best way to make payments to the IRS so that my liabilty is the same as my payroll withholding plus any voluntary payments I make?

I have already received two quarterly dividend payments for which no withholding was made. I will receive two more this year.

Thanks.

Reply to
Boris
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You can make quarterly payments directly to the IRS, or if you are a W2 employee, adjust your W4 form so your withholding for the remaining 2012 checks have enough extra withheld so you are closer to the right total for the year.

Reply to
JoeTaxpayer

Form 1040-ES.

Phil Marti VITA/TCE Volunteer Clarksburg, MD

Reply to
Phil Marti

The company I retired from (Alcatel-Lucent) allows me to go online and tweak my W-4 on a monthly basis. My goal is to owe the IRS less than $100 at tax time. For 2011, the amount due was about $40.

Reply to
njoracle

If you expect your tax to increase, an even better goal (IMHO) is to make use of the "safe harbor" provision: arrange for your withholding to be at least your 2011 tax (if your AGI is $150K or more, this goes up to

110% of the 2011 tax). You'll owe more at tax time, but there's no penalty, and this means you'll be earning the interest instead of the government (although at current interest rates, that may not mean much).

This is also easier to achieve, since you know what the target is and don't have to tweak your withholding so often.

The people who benefit from withholding their full tax burden are people who are unable to avoid spending money that's in their bank account -- they won't have the money in the bank when it comes time to pay the tax bill.

Reply to
Barry Margolin

My suggestion is to use eftps.com.

Reply to
removeps-groups

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