Quote:
Originally Posted by Bill14564
Perhaps trigger was the wrong word. Still, money that is withheld is treated differently than estimated payments in the determination of underpayment penalties. The calculations are avoided when a certain percentage of taxes are withheld even if there was an underpayment. Those calculations cannot be avoided even if the same amount was submitted with estimated payments. That is what I meant by triggering safe harbor rules.
NOTE: Not a CPA, just someone who has worked through this in the past.
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If you haven't paid in 90% of your current taxes or 100% of last year's tax you've got a penalty. The IRS doesn't care if it's from withholding or quarterly estimates. That's the penalty part - there's also an interest calculation if it's not paid in as required.
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Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence. John Adams
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