I know there will be a 10 percent penalty taking out the non roth early but since funds are low and my husband and I are wanting to relocate, I think we should use that money in the mean time to get an apartment/take care of any expenses since wrongful termination. Would someone be able to pay the irs ahead of time or in between the year before the 2019 taxes come due?
Yes you should. You can send in an estimated payment using form 1040ES
https://www.irs.gov/pub/irs-pdf/f1040es.pdf
Or you can pay directly on the IRS website https://www.irs.gov/payments
Be sure to pick the right kind of payment and year.....2019 Estimate
Yes you should. You can send in an estimated payment using form 1040ES
https://www.irs.gov/pub/irs-pdf/f1040es.pdf
Or you can pay directly on the IRS website https://www.irs.gov/payments
Be sure to pick the right kind of payment and year.....2019 Estimate
Making payments, ahead of time is essentially optional. You can wait, to pay, until you file your 2019 tax return, in 2020. But you risk an under payment penalty of approx 5.5% of the amount due (annual rate). This is in addition to the 10% early distribution penalty.
To avoid the underpayment penalty, you should make estimated tax payments for the current tax year if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.
- 2. You expect your withholding and credits to be less than the smaller of: 90% of the tax to be shown on your current year’s tax return, or 100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)
TurboTax (TT) can prepare the quarterly payment vouchers. In your 2017 software, enter at:
Federal Taxes
-Other Tax Situations
-Other Tax Forms
-Form W-4 and Estimated Taxes - Click the Start or Update button
On the next screen answer No to the W-4 question
If your goal is just to avoid the underpayment penalty, then paying 100% of the prior year tax liability is the “safe haven”