Get your taxes done using TurboTax

Because the income tax system is supposed to be pay as you go, I suspect that you could be assessed a penalty for not making quarterly estimated payments even if you only issue yourself one paycheck in December and the withholding from that paycheck (and reported to the IRS on your January 15 quarterly form 941) covers your income tax bill for the year.

 

If you are assessed a penalty and it is your first time, you can request a penalty waiver.

 

You can certainly make quarterly payments in any amount you choose at the IRS website www.irs.gov/payments. You don’t need to send in a paper form 1040-ES or a paper voucher 1040-V if you make online payments, because your online payment is linked to your Social Security number or tax ID number.  You don’t need to use the quarterly payments suggested by TurboTax if you prefer to calculate them a different way.

 

If you did make estimated federal and state income tax payments during the year, you would not also need to withhold federal and state income tax from your December paycheck. You still of course, have to withhold FICA and Medicare, but the Social Security administration does not assess underpayment penalties based on your annualized income.

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