Do normal people really pay quarterly estimated taxes? - Page 2

Sure, if you are not in debt, but if you are taking debt, then you might as well borrow from your own "tax fund" rather than letting your money sit in a savings account for tax purposes during the year and taking debt at a higher interest rate.

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03-01-2024 , 06:14 AM

#27

DumbosTrunk

Verified Coach PLO5

Join Date: Apr 2017 Posts: 7,328

Didn’t think this was a big deal until I went through a government background check and they gave me a hard time for paying late with a penalty (even though I paid in full). Most self-employed people I talked to around that time told me they don’t pay quarterly and just pay the penalty.

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03-02-2024 , 01:32 PM

#28

tgiggity

Pooh-Bah

Join Date: Oct 2016 Posts: 5,782

In my experience the penalty is 0.5% on the total, not per month. So it makes no sense to pay quarterly.

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03-02-2024 , 01:47 PM

#29

GTO2.0

Pooh-Bah

Join Date: May 2012 Posts: 3,784

My wife got laid off last year and evidently checked a box that said I was dead when filling out the paperwork for her severance so we owe like 10K+.

According to TurboTax, there’s no penalty? Do they assess it after you pay and sent you a notice after? Guess ill find out and let y’all know.

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03-02-2024 , 03:06 PM

#30

Brokenstars

Verified Coach NLHE

Join Date: Jul 2012 Posts: 16,106

Quote:

Originally Posted by tgiggity

In my experience the penalty is 0.5% on the total, not per month. So it makes no sense to pay quarterly.

That shouldn't be the case. See below:

https://www.irs.gov/payments/failure...ty#amountshown

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03-02-2024 , 04:28 PM

#31

tgiggity

Pooh-Bah

Join Date: Oct 2016 Posts: 5,782

Quote:

Originally Posted by Brokenstars

That shouldn't be the case. See below:

https://www.irs.gov/payments/failure...ty#amountshown

Strange. I just pay whatever the tax guy says to pay and it's always been basically nothing so never bothered doing quarterlies. Pretty sure I didn't pay a penalty for 5+ years until last year was the first time it even came up.

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03-02-2024 , 07:13 PM

#32

droopy0021

veteran

Join Date: Jul 2005 Posts: 2,384

This thread initially started referring to quarterly estimates, which apply to self employed people that don’t have taxes withheld from a paycheck. The link right below also refers to fail to pay taxes and fail to file a return, which could apply to both employees and self employed. Confusing a bit. Those who had an employer that withheld taxes but end up owing at year end (like the severance example) likely would not be responsible for penalty for not filing quarterly estimates.

I haven’t seen anything to make me believe that as someone self employed filing estimated returns quarterly or monthly is not the way to go.

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