If your penalty is only $5, i would not advise trying to use the AI method to avoid it especially if you had taxable income in the first two quarters. anyone can use the AI method but then you have to use it for every quarter. which means you have to compute your income and tax liability for jan - mar, jan - may - jan - aug and then the whole year (the easy part because that's what's on the return). if you have a tax liability for the early quarters but didn't pay in your taxes until later quarters, you will not likely reduce your penalties. just so it's clear the AI method is not a pro-rata portion of the tax for the whole year but requires the computation of the actual tax liability for the period. you can have a higher tax liability under this method for the first 3 months than you do for the whole year.
the rules for avoiding penalties (i assuming you have no withholding - only pay estimated taxes and ignoring the AI method) ).
no penalty if
timely estimates equal 90% of the current year tax. which means 1/4 must be paid in by 4/15 and an additional 1/4 by each of the following dates 6/15, 9/15/ and 1/15 of the following year (the next business day if the payment date falls on a Saturday, Sunday, Federal holiday
or
timely estimates - same payment dates - equal 100% of the previous year's taxes (110% if the previous year's adjusted gross income over $150,000)
