I am asking the question precisely because I put my numbers in the worksheet 2-7 of publication 505 and in the form 2210, and they look weird.
Suppose you ended up receiving even income throughout the year (but you don't now that in advance).
Your total tax for the year: $60,000.
Your tax each month: $5,000.
90% of this: $4,500 a month.
Employee withholds: $4,400 a month.
Additional estimated tax to avoid penalty: $100 a month.
Now, let's say you made a small mistake and your tax is actually $60,120. Let's check how the penalty is calculated.
Required installment each quarter (line 10 of form 2210): $13,530
First quarter: you owe $13,530
Your estimated payment: $300
Employer withheld: $13,200
Total payments: $13,500
Underpayment: $30, expected, no big deal
Second quarter: you owe $13,530
Your estimated payment: $300
Employer withheld: $8,800
Total payments: $9,100
Underpayment: $4,430. Oops...
You would need to pay $4730 in the second quarter instead of $330 to avoid the underpayment penalty. This includes your usual pament plus missing one month of employer withholding.
Does my question makes sense now?
