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eyeman03
Level 1

Why does IRS care if I owe $1000 or more in taxes & need to pay estimated taxes for the current tax year? I don’t mind paying a big lump sum when due.

Paid 5 K two years ago & no worries.  I look at it as a tax-free 5 K loan from the IRS.  Is this why the IRS caps these "tax-free" loans at 1k?
2 Replies
fanfare
Level 15

Why does IRS care if I owe $1000 or more in taxes & need to pay estimated taxes for the current tax year? I don’t mind paying a big lump sum when due.

IRS doesn't want you to have a big tax bill on April 15th.

So much so that it will impose penalties.

eyeman03
Level 1

Why does IRS care if I owe $1000 or more in taxes & need to pay estimated taxes for the current tax year? I don’t mind paying a big lump sum when due.

Thx for the reply.

I guess the key is to stay under 1K, and then you get a tax-free loan you pay back in full by the following Apr 15.  If >1K, you still get the “loan” but paying back in full + interest.

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