Just realized I was paying estimated taxes way too early every quarter

I was sitting in my truck after a paint job in Arlington last fall, adding up my receipts, and it hit me that I'd been sending the IRS 15% of every invoice as soon as it hit my account. Has anyone else overpaid like that and had to wait months for a refund?

3 comments

3 Comments

kevin_williams17d ago

Yeah I did that too. Just set up quarterly payments based on last year's taxes.

ivan46216d ago

Gotta disagree a little @henry_anderson54, Ive been doing the last-year method for years and it works fine as long as your income doesnt jump too much. The IRS even has a safe harbor rule for it (you know, they waive penalties if you pay enough).

henry_anderson5416d ago

Oh man @kevin_williams, "based on last year's taxes" - that's a bold strategy. I tried that once and the IRS sent me a love letter with a bunch of zeros I didn't expect. Now I just add an extra 10% to whatever I think I owe and hope for the best. Honestly, quarterly payments feel like a necessary evil where you're never quite sure if you're overpaying or underpaying until tax day rolls around.