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Shoutout to the IRS agent who explained estimated payments like a human
I was sweating bullets over my first quarterly payment last year and called the IRS helpline. The lady on the phone, Patricia from the Kansas City office, told me to just pay 110% of what I owed last year and called it a safe harbor. Has anyone else found that shortcut actually works or is there a catch I'm missing?
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hunt.hayden7d agoMost Upvoted
Ngl I heard some tax prep guy on a podcast talk about this exact thing and he said the 110% rule is bulletproof but only if you actually hit that number. Miss it by even a few bucks and the penalty clock resets apparently. I remember him telling a story about a client who paid 109% and still got hit with underpayment penalties. Patricia from KC sounds legit though, that's a solid shortcut for most people. Just don't cut it too close or the IRS computers will flag you anyway.
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anthony_jackson318d ago
Yeah Patricia's right, 110% works perfectly for safe harbor unless you make over $150k.
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matthewking8d ago
Wait are you sure about that 150k cutoff? I thought the 110% safe harbor rule applied to everyone regardless of income if you're using last year's tax as the baseline. Maybe I'm mixing it up with something else but I swear my CPA told me there's no income limit on the 110% rule, only if you want to use the 100% of previous year's liability instead. You single filers might have different rules but for married filing jointly I thought the threshold was way higher than 150k.
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