Estimated Taxes Flashcards
1
Q
What is the required minimum estimated taxes?
A
The taxpayer is required to make estimated quarterly tax payments if both of the following conditions are met:
1) $1000 or more tax liability
2) inadequate tax estimates
90% current year’s tax
100% last year’s tax (this apply even if tax payer has 0 tax liability in prior year.
Exception: if a taxpayer has AGI in excess of $150,000 in the prior year, 110% is used to compute safe harbor for estimated payment.
2
Q
What is the failure to pay estimate Taxes penalty?
A
If the taxpayer does not make the proper quarterly estimated payment, penalty may be assessed. That is no penalty due under any circumstances if the balance of tax due at filing is under $1000.
