I have been growing my nest egg in savings accounts for years now and eventually decided I wasn't being smart with my money and should take advantage of the market to grow thing faster. Did this years ago but stopped for various reasons or lessoned. This last year I started investing in some moderate dividend ETFs and stocks. Last year I made basically salary and minimal interest. I'm going to make up numbers here.
So let's say I made $160k in salary last year and I had to pay a total in taxes of $30k. Based on the safe harbor info I understand I need to pay $30k in taxes this year plus 10% for a high earner. So as long as I paid $33k in taxes this year won't get dinged even though my income may have almost doubled this year in dividends.
So I do my taxes and obviously not sure what it will be right now but let's say I owe an additional $25k in dividend taxes. I pay the additions but don't get dinged because I did my 10% over last year.
Is it safe to say that the safe harbor concept is basically not super value add go forward? I know in theory with DRIP my dividends will potentially grow, but over the course of a year won't grow that much so basically I will need to almost pay the full tax amount next year since I'd be talking about $30k plus $25k or $55k in taxes this year so would have to at least pay $60,500 in taxes by the end of 2026 with the additional 10%?
