Can this 110% tax liability be paid in monthly installments this year.
yes you can. use IRS Direct Pay but note that 25% of 110% your 2021 tax must be paid by 4/18/2022 another 25% by 6/15/22 then 9/15/22 and finally 1/17/2023
with your income so uneven and especially since you probably haven't paid in through withholding and estimated taxes 55% (1/2 of the 110%) of your 2021 tax by 6/15/2022 you may be subject to penalties for underestimation for the 1st two quarters.
when you do your 2022 return you can use the annualized income installment method to figure if you have a penalty.
you can use the 2021 form 2210 pages 3 and 4 to figure what needs to be paid now or by 9/15
https://www.irs.gov/pub/irs-pdf/f2210.pdf
here are the rules to avoid an underpayment penalty.
There will be no federal penalties in 2022 for not paying in enough taxes for the year if withholding
- And timely estimated tax payments equal or exceed 90% of your 2022 tax
or
- And timely estimated tax payments equal or exceed 100% of your 2021 tax (110% if your 2021 adjusted gross income was more than $150K)
or
- the balance due after subtracting taxes withheld from 90% of your 2022 tax is less than $1,000
or
- your total taxes are less than $1,000
state laws differ
