To: Peter Sherman who wrote (3032 ) 12/15/1999 11:13:00 PM From: Lynn Read Replies (2) | Respond to of 24042
Its the smaller of last year's tax or 90% of this year's, which ever is less, _except_ for higher income people who have to pay the smaller of 90% this year's estimated or 105% of last year's actual tax. To quote from IRS publications: General rule. You must make estimated tax payments for 1999 if you expect to owe at least $1,000 in tax for 1999 after subtracting your withholding and credits, and you expect your withholding and credits to be less than the smaller of: 1.90% of the tax to be shown on your 1999 tax return, or 2.100% of the tax shown on your 1998 tax return. Your 1998 tax return must cover all 12 months. Note. If all your 1999 income will be subject to income tax withholding, you probably do not need to make estimated tax payments. Exceptions. There are exceptions to the general rule for farmers, fishermen, and certain higher income taxpayers. See Figure 5-A and chapter 2 of Publication 505 for more information. irs.ustreas.gov Publication 505 Tax Withholding and Estimated Tax Single $126,600 Married filing jointly or qualifying widow(er) $189,950 Married filing separately $94,975 Head of household $158,300 ... Estimated tax safe harbor for higher income individuals. For installment payments for tax years beginning in 1999, the estimated tax safe harbor for higher income individuals (other than farmers and fishermen) has been modified. If your adjusted gross income is more than $150,000 ($75,000 if married filing a separate return), you will have to deposit the smaller of 90% of your expected tax for 1999 or 105% of the tax shown on your 1998 return to avoid an estimated tax penalty. irs.ustreas.gov