Does anybody know if it's ok to make a partial estimated tax payment?

[MidwestTransplant]

I made a bunch less this year and don't want to make the full final estimated payment.

They voucher says is for X but I will pay less than that.

Thanks

[Statistical]

1. The following is given AS IS with no warranty....

Per the IRS:
The United States income tax is a pay-as-you-go tax, which means that tax must be paid as you earn or receive your income during the year. You can either do this through withholding or by making estimated tax payments. If you do not pay enough tax, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will have paid enough tax to avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. There are special rules for farmers and fishermen. Please refer to Publication 505, Tax Withholding and Estimated Tax, for additional information.

So to determine if you will get a penalty.
1) Calculate your taxes due via 1040.
2) Add up all your estimated payments (including this "short"/partial estimated payment)
3) Subtract 2 from 1

IF #3 is negative (i.e. govt owes you money)
OR
IF #3 is less than $1000
OR
IF #2 is 90%+ of #1 (example: your #1 is $13,000 your #2 is $11,800 then you paid 91% of taxes do = good)
OR
IF #2 is less than taxes paid last year

then you will have no penalty

Otherwise uncle sam will want his 2 lbs of flesh.

[uppityperson]

2. The amount they put on the voucher is based on past yr's income

You need to pay enough to make yourself not owe IRS. If you have made less, I'd say pay less.

[notadmblnd]

3. send what you can

they will send you a bill for the rest if you owe

[Coyote_Bandit]

4. It's an ESTIMATED tax payment

the amount is based on your prior year tax liability and assumes that moneys are earned evenly over time.

Worst case if you underpay your estimated tax is that you will owe the tax plus a penalty wihen you file your return in April.

If your earnings this year are less than your earnings last year then your tax liability will likely be less.

[customerserviceguy]

5. Plus, if you file by Jan 31st, you can pay the rest (if any) then

and skip the Jan 15th payment.

What happens is that underpaid estimated taxes work like interest, if you've paid the other three payments in a timely fashion, and you really did owe the amount of that last voucher (sounds to me like you most likely don't) then the penalty will be calculated in the same manner as interest on the sum you are underpaid by. At present rates, that's not a heck of a lot in percentage terms. And if you do make the partial payment, that just reduces the amount the interest will be calculated on, if there is a sufficient balance due when you file.

I used to be enrolled to practice before the IRS back in the 80's, but haven't touched it much since 1990, so your mileage may vary.

[MidwestTransplant]

6. Thanks for the info and to everybody else too

[MidwestTransplant]

8. Just to be clear is there potential interest AND penalty or is that one in the same.

There is a chance I will be a few K underpaid. I won't be able to file by Jan 31st as I have to wait for K1s.

Thanks

[Dreamer Tatum]

7. If you're making estimated payments, how is there an amount on the voucher? nt

[MidwestTransplant]

9. Because the estimate is based on the previous years taxes owed divided by 4

[Dreamer Tatum]

10. That's ONE way to do it, if you make the same amount

but even then, I've never seen a pre-printed voucher.

[MidwestTransplant]

11. My accountant includes them with my return. Even if you don't make the same amount

year to year (I don't), the IRS rules still contemplate a specific estimated payment.

[Dreamer Tatum]

13. Yes, but you also have a short quarterly return you can use.

For example, I made a lot less in Q4 than in Q1-Q3, and my estimated taxes (which I mailed today) reflected that.

But of course the issue is what to do if you have to send in an amount you believe is too small...

[treestar]

12. Unless you are talking big bucks

Unlikely they will bother with enforcing that to the letter.

As long as they have their $$ April 15, they usually don't bother you.

[Stinky The Clown]

14. If you underestimate by even 1 cent, they will circumcise your oldest male child with ......

..... a rusty nail clipper.

[customerserviceguy]

15. Unless you're Tim Geithner

How can we confirm him after raking Joe the Plumber over the coals for a couple thousand bucks in back taxes?