I just send in my estimated quarterly taxes and boy is cutting a big check hard to swallow. It’s not easy to fill out estimated quarterly taxes because there’s so much, guess what, estimation!
It’s not simply about adding up how much I made in the first quarter and paying a 25% tax on that. Like most tax forms, it’s just more complicated. I just had to estimate how much money I am going to make in 2011! Sure, I can use the first 3 months as a base, but there’s SO much that’s unknown for me, so I guessed high, and if I’m wrong, I’ll just get some extra back come next March or April.
To top it off, I have to pay some self-employment tax, so it comes out to about 40% of my side business income. That sucks, I want my money back!
While I’m brooding over ways to avoid paying taxes, check out these great personal finance articles from some of my favorite bloggers:
My Failed Attempt to Understand Dollar Cost Averaging (via PT Money)
Spending or Saving? How to Balance Money Management With Your Life (via The Financial Blogger)
Side Business Idea For Geeky College Students: Hacking iPhones (via My Money Blog)
Job Hunt Taken to Absurd Levels – Plastic Surgery? (via Darwin’s Money)
Fun Facts About the 2010 Tax Season (via Bargaineering)
Saving or Investing Money to Get Rich (via Studenomics)
10 Things We Just Can’t Live Without (Even Though Grandma Did) (via Len Penzo)
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Luckily there is the safe-harbor rule to fall back on. Just pay 110% of what you made last year and you should be straight to the gate. Isn’t that right? This is my first year paying them and that’s what I’m going to do. I’ll hopefully fall short come tax time next year, but I shouldn’t face a penalty.
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Daniel Reply:
April 15th, 2011 at 1:37 pm
@Philip, I think it’s 100% of last year’s tax (unless you make over $150,000 AGI, in which case it’s 110%.
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