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Strategies & Market Trends : IRS, Tax related strategies--Traders -- Ignore unavailable to you. Want to Upgrade?

To: Snowy who wrote (279)	4/25/1998 9:11:00 PM
From: Colin Cody	Respond to of 1383

There are several ways to AVOID the FEDERAL underpayment penalties without paying all year long, and then having a big profit at the end of the year. The Fed is pretty fair about it. The only real problem is when your income is expected to go DOWN from the previous year. That can lead to more planning DURING the year. If you are talking big bucks here, it may be worth your while to hire an "EA" or other tax professional to do some planning. Colin

To: Snowy who wrote (279)	4/26/1998 1:46:00 PM
From: Rick	Read Replies (1) \| Respond to of 1383

This is what I want to avoid... Surely, I can paid on a quarterly basis and still have withholdings taken out on my pay check... If I can't, I don't understand why, what type of organization would turn down cash flow...

To: Snowy who wrote (279)	4/27/1998 12:19:00 AM
From: Don Roberts	Respond to of 1383

>The only problem with paying once at the end of the year is that >if you have a big profit, you will be hit with an penalty for >underestimating your income. That happened to me. True ... but it would be wise to evaluate if you could make more money than the fine if you had the money in your account and traded it. Assuming the penalty was 10% ... I know I can do better than that over a few months period. Hence, it may be better to just pay the fine and put your $$$ to work. Later, Don