Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Joe Hoek who wrote (32877)	4/12/1999 2:28:00 PM
From: SMALL FRY	Respond to of 120523

Yes... I do anyway. I think we have some CPA's lurking here... maybe they can elaborate... SF

To: Joe Hoek who wrote (32877)	4/12/1999 2:33:00 PM
From: JakeStraw	Respond to of 120523

Joe, if you think you'll owe a lot in taxes due to gains where no tax was withheld then making quarterly payments might not be a bad idea.

To: Joe Hoek who wrote (32877)	4/12/1999 2:59:00 PM
From: aliveinsf	Read Replies (2) \| Respond to of 120523

Income Tax Question: If you do not have enough withholding to pay your income taxes and you will not have paid in enough taxes this year equal to 100% of last years tax, then you will have to make estimates in order to avoid underpayment penalties. When estimates are required, you have the option of making equal estimates or estimates which flucuate with quarterly income. When figuring withholding penalties, the taxpayer has the option of spreading all income evenly over the year (hence equal quarterly estimated payments) or recoginizing income in the quarter it was earned...(actually it is not quarterly...but 3 mos, 6 most, 8 mos, 12 mos.... So, with a big gain in the first quarter, you COULD spread this over the entire year and make even estimated payments so that the total tax paid in (estimate and withholding) is safe....i.e. no underpayment penalties apply.....penalty safe is 110% of last years federal income tax liability.... so, generally speaking, if you paid $50,000 in federal taxes for 1998, to be penalty safe you would need to "pre-pay" $55,000 in 1999, either in withholding or estimated payments.. You can always have your employer withhold taxes at a higher rate and avoid dealing with estimates, and withholding taxes can be assumed to be paid pro-rata over the year, even if it is back end loaded... hope this helps... if the numbers are really big, you should consult a tax professional..