Why uneven Calif est taxes?

Question

The tax program that my tax preparer uses spit out Calif estimated tax payment vouchers for 2011 with uneven payments, namely 30% in Apr, 40% in Jun, zero in Sep and 30% in Jan'12.

Is there any reason for such unevenness, especially zero in Sep -- perhaps something specific to Calif?

(The federal est tax payments are even.)

I know: this is a question for my tax preparer. But I don't want to bother him with it at this busy time of year. The question comes up every year, and I tell myself I will ask him after Apr, when he comes up for air. And every year, I forget. Or I decide not to bother him after all, having already adjusted the payments myself so they are even.

I could understand shifting the burden from Jan'12 into Sep. But I make the 4th payment before Dec 31 anyway.

Salmon Egg · Accepted Answer

In article ,         wrote:I would like to know the reason as well. I am guessing that your tax preparer used TurboTax, because that is pretty much what TurboTax spit out for me. It is one of the things about TurboTax that drives me crazy, but it seems that other tax programs would drive men even crazier. I tried to override this. I can, but it is not pretty. If a program does such things, it greatly reduces my confidence in that program.Bill

Avrum Lapin · Answer

In one of the many budget fixes California mandated uneven estimated tax payments.  Don't ask, don't expect logic in tax laws

removeps-groups · Answer

Because CA is broke they accelerated the estimated payments to get more money upfront so that they can spend it now. They also increased the withholding for W-2 earners, so you could end up with a big tax refund (although you can claim more exemptions to negate this).

Also you only have to pay 90% of the amount, so the amounts are 27,

36, 0, 27, and remaining 10% next April.

See

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Pico Rico · Answer

or California's budget process.

sliceof314159 · Answer

Well, I'll be! I am sure I have seen this in many previous years as well, long before this legislation. But perhaps not to such a degree (zero 3rd payment). I don't recall.

Anyway, thanks for the information.

Salmon Egg · Answer

In article , Avrum LapWhy do we tolerate such nonsense? Are our legislators trying to irritate us?I once had the forlorn hope that TurboTax would simplify my life. Fat chance! I thought that if I looked at the worksheet, I would be able to understand how the installments were calculated. A brief glance, however, seems inadequate.What would be wrong with just taking 2011 tax liability, dividing it by four, and putting that amount onto each of the 540-ES vouchers?Bill

Salmon Egg · Answer

After seeing the post by         I went back to TurboTax to see what happened. Using the TurboTax form there was no way I could tell what the payments would be from instructions on the form. It was essentially saying: Trust us. We will get it right.After searching around a bit for help, I found a short blurb saying what the fractions should be for the payments. Those fractions were not on the form itself. It is little things like that that have driven me to use the Easy Step method instead of going to the forms early in the process. It seems that we are subjected to more mushroom treatments than ever.Bill.

removeps-groups · Answer

In 2008 the ratios were normal: 22.5, 22.5, 22.5, 22.5, 10. In 2009 they were: 27, 27, 18, 18, 10. In 2010 they are: 27, 36, 0, 27,

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Also, if your income if over one million, you cannot use prior year safe harbor. It's the same threshold for single and married taxpayers, hence it is a marriage penalty.

Gene E. Utterback, EA, RFC, AB · Answer

You've gotten a lot of responses to your post and most have hit the nail on the head - CA made "adjustments" to payment schedule calculations. Why? Only Arnie can tell you that for sure, but things like this have happened in the past. Typically it is because they need to shift income into a different fiscal period for budgetary purposes. Why do you think Federal estimated payments look like this -

Jan, Feb, Mar = first quarter - payment due April 15 Apr & May = second quarter - payment due June 15 June, July, Aug = third quarter - payment due September 15 Sept, Oct, Nov, Dec = fourth quarter - payment due Jan 15

Congress had a budget shortfall several decades back and they "fixed" it by changing the due date of the last estimate for the fiscal year. "America, what a country!" Looks like California has done the same thing.

Gene E. Utterback, EA, RFC, ABA

Why uneven Calif est taxes?

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