The last three years, I have owed in the low five figures of taxes, mostly due to a large bonus being taxed at 22%, while I am actually in a higher tax bracket than that. I also have about 20K in dividends and interest, with no withholding on that. But the issue is mostly due to the bonus. Each of the last two years, I have submitted a new W4, but it didn't really make a dent, obviously I didn't do enough. Somehow the last two years, I have not had an underpayment penalty. My luck ran out this year, and I have a $120 underpayment penalty. TurboTax estimated an amount of estimated taxes that exceeded my tax liability this year by 8K, so I don't want to do that. I played around with the numbers and got it down to pretty close to my liability this year, which I hope is enough to avoid a penalty or make it very small. I don't yet know what my bonus or dividends will be, so I run a risk of overpaying.
This feels really weird to me ... like 93% of my income is W2 income. Is it common among higher earners to have to pay estimated taxes? I file head of household and am above income limits on almost everything, but a look at what the tax table would be if I were married and this was my married income is pretty irritating!
