Here is a link to tax caster to assist in calculating your Federal Tax: https://turbotax.intuit.com/tax-tools/calculators/taxcaster/
You can then adjust your quarterly payments accordingly.
The IRS also offers two "safe harbor" methods for determining whether you are subject to a penalty. If you meet one of these safe harbor amounts, the IRS won't charge an estimated tax penalty, even if you owe more than $1,000 at the end of the year.
The requirements are that you pay:
- 90% of the tax you owe for the current year. Estimate what you'll owe and pay at least 90% of this amount by making timely quarterly estimated tax payments or through paycheck withholding.
- 100% (or 110%) of last year's tax bill. Pay 100% of the tax shown on your prior-year tax return before applying estimated payments, withholding, or refundable tax credits. If your adjusted gross income is more than $150,000 (or $75,000 if you're married and file a separate return from your spouse), the safe harbor is 110% of your prior-year tax.
IRS tax penalties - how to avoid them
Have an amazing day. Evelyn M (CPA 20+ years)
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