Wrestled with quarterly vs annual estimated tax payments this year

I went with quarterly payments because I thought it'd be easier to budget, but now I'm looking at $1,200 in penalties because I miscalculated one quarter back in June. Has anyone else had better luck just doing a big lump sum at year end?

3 comments

3 Comments

andrew_baker97d ago

You mentioned going with quarterly to make budgeting easier, but I think the real trap is how one bad quarter can mess up the whole year. My accountant told me annual payments give you more breathing room to square up your numbers at the end, especially if your income jumps around month to month. Might be worth running the math on a lump sum to see if the penalty risk is lower for your situation.

the_felix7d agoTop Commenter

Gotta disagree man, one bad quarter doesn't wreck your year if you're tracking your numbers month to month. Annual payments just let you kick the can down the road and make it way easier to get hit with a huge unexpected bill and penalties.

kai_ramirez385d ago

Actually you and Andrew make a solid point there. Might have to reconsider my whole approach.