Hi: I'm a W-2 employee with withholdings and have self-employment income. Normally, I increase my W-2 withholding to cover federal tax/SE tax from my SE. But this year I got larger than normal self-employment income in March. This would mean I have to increase withholdings by several thousand dollars for the remainder of the year. My options as I see them:
1) I can make a large "first estimated tax payment" (about 10-15K) so that I don't have to increase my withholdings.
2) I can increase my withholdings for the remaining year.
I am hesitant to use option 1 since on form 2210, only withholdings (line 6) can be used to determine underpayment penalties (or the need to file form 2210). But then again, when I make a large first estimated tax payment for Q1 (my option 1), this seems to be the cleaner method.
Is there any way I can make my estimated tax payment and still NOT file Form 2210?
Bonus question: Do all self-employed individuals without W-2 withholdings file form 2210?
Thanks all!
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You are only going to file Form 2210 if you have an underpayment of taxes.
If it were me, I would go with option 1. As long as you have enough estimated tax payments and withholdings, you will not need to file From 2210.
Your bonus question is, no. If they make estimated payments that pay at least 90% of the tax due, they would not need to file form 2210.
The link below has a section about avoiding the underpayment penalty that I think will be helpful.
You are only going to file Form 2210 if you have an underpayment of taxes.
If it were me, I would go with option 1. As long as you have enough estimated tax payments and withholdings, you will not need to file From 2210.
Your bonus question is, no. If they make estimated payments that pay at least 90% of the tax due, they would not need to file form 2210.
The link below has a section about avoiding the underpayment penalty that I think will be helpful.
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