Published on Consumer Reports, 2018
If you file quarterly taxes because you are self-employed or are a retiree with significant income, you can protect yourself from penalties by overpaying in the first and second quarter, says Gary DuBoff, a principal in the tax and accounting department at MBAF, a public accounting firm based in New York City.
The IRS’ “safe harbor” rule says that if you pay 110 percent of last year’s tax—or 90 percent of your projected tax for 2018—you’ll be protected from penalties for not paying enough tax.
Don’t worry about forking over too much to the IRS. “You always can go back later in the year and adjust on your third or fourth-quarter payments,” DuBoff says.
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