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Thread: Paying quarterly taxes vs. one big yearly chunk

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    Default Paying quarterly taxes vs. one big yearly chunk

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    Last edited by Diamond Dust; 04-26-2019 at 10:18 PM.

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    Default Re: Paying quarterly taxes vs. one big yearly chunk

    Yes, you really should pay quarterly in order to avoid the IRS charging you interest at the end of the year, and if you don't prepay your estimated quarterly taxes then you will not receive a refund at the end of the year, unless you are eligible for earned income credit (if you have dependents) in which case they will deduct what you owe from whatever you would get back from eic.

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    Senior Member CherryPepper's Avatar
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    Default Re: Paying quarterly taxes vs. one big yearly chunk

    ^ The only reason you get a refund is because you overpay throughout the year and the basically IRS get's an interest fee loan from you.


    No, it's not a big deal. You will have a small penalty fee but the IRS makes more money that the fee in interest off your money throughout the year. You could stick the money in savings and earn the interest yourself.The only way I would not recommend this is if you are not responsible enough to have the money you need come April 15th the following year.

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    Default Re: Paying quarterly taxes vs. one big yearly chunk

    You only get fined if they catch you.

    It's not like you check a box on the forms letting them know that you didn't pay quarterly and then pay a set fee. They have to notice that you didn't pay quarterly and then track you down and send you a letter about the penalty, which is small.

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    Senior Member CherryPepper's Avatar
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    Default Re: Paying quarterly taxes vs. one big yearly chunk

    ^ lol that's exactly what I do! I use Turbo Tax though (it does automatically calculate your fee once it notices you didn't pay quarterly) and the fee is not a big deal to me since I've always expected it.

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    Default Re: Paying quarterly taxes vs. one big yearly chunk

    Quote Originally Posted by CherryPepper View Post
    ^ lol that's exactly what I do! I use Turbo Tax though (it does automatically calculate your fee once it notices you didn't pay quarterly) and the fee is not a big deal to me since I've always expected it.
    LOL, I fill everything out manually and I've never paid a fee. The IRS can bite me. The only want quarterly payments so they can earn more interest. I earned the money so I figure that interest should be mine.

    A friend of mine owed over $400,000 to the IRS and they settled for $6,000. After seeing that happen, I just don't give a shit anymore. If they find out that I stiffed them for their measly couple hundred bucks over all these years, I'll toss them a fiver to shut them up.

    I'm just so not scared anymore. I know people who write off ALL of their groceries, soaps, shampoos, makeup, concert tickets, etc. If they don't go to prison when they get caught, then my mostly honest ass will be fine. I spent way too many years toeing the line terrified of the big bad taxman. I'm done with it.



    *** Oh and I wanted to add for the thread in general, you're only even supposed to make quarterly payments if you owe more than $1000 a year in taxes. That number could be slightly off but it's something like that. If you're writing a $60 check to the IRS, they don't expect four $15 checks throughout the year.

    You also get a free pass on the quarterly payments the first year you owe that much in taxes. Once you've made that much, you're supposed to set up the quarterlies if you estimate that your income will remain stable or increase.

    People who get refunds do not need to make quarterly payments. That would be bizarre.
    Last edited by MarvelGirl; 04-06-2011 at 09:00 PM.

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    Default Re: Paying quarterly taxes vs. one big yearly chunk

    Quote Originally Posted by MarvelGirl View Post



    *** Oh and I wanted to add for the thread in general, you're only even supposed to make quarterly payments if you owe more than $1000 a year in taxes. That number could be slightly off but it's something like that. If you're writing a $60 check to the IRS, they don't expect four $15 checks throughout the year..
    If you'll owe $1000 or more for the year, including income tax plus self employment tax, you are required to make estimated payments. If you don't, you'll pay additional penalties.

    Yes, you can make the interest yourself if you take your quarterly taxes and put them in an interest bearing account. I just would rather give it to the IRS instead of holding on to it myself- only for the simple fact that I do have dependents, and I like getting that big $5-$6k check at the end of the year.. and when I file my taxes, I am eligible for EIC- when you are self-employed and are getting EIC that gives the IRS a red flag, and almost a guaranteed audit.. and it's not a matter of 'if they catch you' it's WHEN they catch you- and then all of those penalties will come to bite you in the ass.

    Oh and with the economy the way it is- big brother is most definitely looking for those people who owe money, and they are more on their game then they have ever been.

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    Default Re: Paying quarterly taxes vs. one big yearly chunk

    I'm supposed to pay quarterly but I put it in a smartypig.com interest bearing account instead. That way I get some extra money instead of giving it to the govt. It's not a lot, but when I cash out at the end of the year I get like, 40 bucks back.

    This is a great thread with excellent advice.


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    Default Re: Paying quarterly taxes vs. one big yearly chunk

    Quote Originally Posted by BBWChanel View Post
    If you'll owe $1000 or more for the year, including income tax plus self employment tax, you are required to make estimated payments. If you don't, you'll pay additional penalties.

    Yes, you can make the interest yourself if you take your quarterly taxes and put them in an interest bearing account. I just would rather give it to the IRS instead of holding on to it myself- only for the simple fact that I do have dependents, and I like getting that big $5-$6k check at the end of the year.. and when I file my taxes, I am eligible for EIC- when you are self-employed and are getting EIC that gives the IRS a red flag, and almost a guaranteed audit.. and it's not a matter of 'if they catch you' it's WHEN they catch you- and then all of those penalties will come to bite you in the ass.

    Oh and with the economy the way it is- big brother is most definitely looking for those people who owe money, and they are more on their game then they have ever been.
    You do not understand how taxes work and people should not take any of your advice.

    If you are receiving a $5,000 to $6,000 refund each year, you should NOT be making quarterly payments.

    Things like the EIC are factored in to determine how much you owe in taxes in order to determine if you owe $1000 or more.

    It sounds like you are giving the IRS a big interest free loan each year just for shits and giggles. This is stupid. People who get refunds should not be making quarterly payments, that makes ZERO sense.

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    Default Re: Paying quarterly taxes vs. one big yearly chunk

    Quote Originally Posted by Diamond Dust View Post
    By the way, $400,000? Holy shit, your friend is loaded!
    LOL, not really. She just didn't bother to file taxes for about 10 years.

    No jail time and they settled for $6,000. It makes me wonder why I write them a check at all.

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    Default Re: Paying quarterly taxes vs. one big yearly chunk

    Quote Originally Posted by MarvelGirl View Post
    You do not understand how taxes work and people should not take any of your advice.

    If you are receiving a $5,000 to $6,000 refund each year, you should NOT be making quarterly payments.

    Things like the EIC are factored in to determine how much you owe in taxes in order to determine if you owe $1000 or more.

    It sounds like you are giving the IRS a big interest free loan each year just for shits and giggles. This is stupid. People who get refunds should not be making quarterly payments, that makes ZERO sense.
    I don't think you understood what I was saying.. and I do know taxes It's not my first time filing them- I'm 26. First of all- I am getting that big of a refund because I PAY QUARTERLY.. Just like how when you have a regular job, you get taxes taken out of each check- well I PAY my estimated taxes every 3 months, and at the end of the year I get it BACK, plus some. Yes, I understand I am giving the IRS an interest free loan- which I am not concerned about. Sorry, 2%-5% interest at a bank isn't impressive to me. I'd rather get a large chunk of money at the end of the year.. because I own a home, I use this money at the end of the year to pay my property taxes. As I mentioned ABOVE I do this for a reason- not because I am stupid. Please do not be condescending- I don't appreciate it... and I understand fully what I am doing, and so does the lady that helps me do my taxes

    this is what I said above:
    If you'll owe $1000 or more for the year, including income tax plus self employment tax, you are required to make estimated payments. If you don't, you'll pay additional penalties.

    Yes, you can make the interest yourself if you take your quarterly taxes and put them in an interest bearing account. I just would rather give it to the IRS instead of holding on to it myself- only for the simple fact that I do have dependents, and I like getting that big $5-$6k check at the end of the year.. and when I file my taxes, I am eligible for EIC- when you are self-employed and are getting EIC that gives the IRS a red flag, and almost a guaranteed audit.. and it's not a matter of 'if they catch you' it's WHEN they catch you- and then all of those penalties will come to bite you in the ass.

    Oh and with the economy the way it is- big brother is most definitely looking for those people who owe money, and they are more on their game then they have ever been.



    Now please tell me, what exactly was wrong with what I said there? IF YOU WILL OWE $1,000 OR MORE you are REQUIRED to make payments. <-- this was just a reiteration of what you had said. So...

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    Default Re: Paying quarterly taxes vs. one big yearly chunk

    LOL, you're so lost.

    The lady doing your taxes should find a new job because she's giving you awful advice.

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    Default Re: Paying quarterly taxes vs. one big yearly chunk

    Okay.. I'm over it girl... you can look that up on the IRS site. It makes sense for ME- I wouldnt GET 5k-6k at the end of the year if I DIDN'T pay quarterly.. LOL
    I'm assuming you are not eligible for EIC and don't have dependents and don't pay property tax- or you would see where this is practical for my situation.

    Oh, and as far as them gaining interest off of me allowing them to hold my money, because I'm guessing that this is the part that you are concerned about- that's all right with me that the government earns interest off of my money. In fact, I am perfectly happy doing so. I understand that I don't HAVE to file quarterly because I will get my EIC at the end of the year even if I do not- however, I get MORE back when I file quarterly, so that is what I do. I didn't say you HAVE to file quarterly- you only HAVE to if you will owe $1,000 or more for the year.. which you said yourself.
    Last edited by BBWChanel; 04-07-2011 at 04:35 PM.

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    Default Re: Paying quarterly taxes vs. one big yearly chunk

    Quote Originally Posted by BBWChanel View Post
    Okay.. I'm over it girl... you can look that up on the IRS site. It makes sense for ME- I wouldnt GET 5k-6k at the end of the year if I DIDN'T pay quarterly.. LOL
    I'm assuming you are not eligible for EIC and don't have dependents and don't pay property tax- or you would see where this is practical for my situation.

    Oh, and as far as them gaining interest off of me allowing them to hold my money, because I'm guessing that this is the part that you are concerned about- that's all right with me that the government earns interest off of my money. In fact, I am perfectly happy doing so. I understand that I don't HAVE to file quarterly because I will get my EIC at the end of the year even if I do not- however, I get MORE back when I file quarterly, so that is what I do. I didn't say you HAVE to file quarterly- you only HAVE to if you will owe $1,000 or more for the year.. which you said yourself.
    I'm in my 30s, own a home and also have children. You desperately need a better accountant.

    You still get EIC without paying quarterly taxes. I did it for years back when my income was low enough to qualify for it.

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    Default Re: Paying quarterly taxes vs. one big yearly chunk

    Quote Originally Posted by Diamond Dust View Post
    I don't know, I don't think I'm eligible for the EIC, I just did the standard deduction because I don't wanna get an audit. Anyway, maybe you're both right...that you probably should pay quarterly taxes but it's not a really big deal if you don't. It also depends on your individual circumstances it sounds like (having dependents, etc.) from what I gathered.

    And dang, only paying $6,000 in penalties for owing that much is crazy! Your friend got really lucky. I'm still overall scared of the IRS, but not quite as paranoid as I was before I read this thread.

    If you paid more than $1000 in taxes for the year, you probably aren't eligible for it. It's factored in to determine what your taxes are though.

    For example, if you owe $2,000 in taxes but you're eligible for a $5,000 EIC, then you no longer owe more than $1,000 in taxes. You would then be owed a refund of $3000. A person in that situation should not make quarterly payments.

    But people will do whatever they want.

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    Default Re: Paying quarterly taxes vs. one big yearly chunk

    Quote Originally Posted by MarvelGirl View Post
    I'm in my 30s, own a home and also have children. You desperately need a better accountant.

    You still get EIC without paying quarterly taxes. I did it for years back when my income was low enough to qualify for it.
    MarvelGirl- I stated in my last post that I am aware I will get EIC, beings I make less than 48K a year and have dependents- without paying quarterly. Again,- what I am saying, and all I am saying is that IF you want to pay the penalty for not filing quarterly, and put your money in your account and gain your own interest instead of allowing the IRS to collect interest- that's fine (with the exception of owing more than $1,000), but if you want to AVOID the penalty, then pay quarterly (if you would end up OWING money to the IRS)

    In MY particular circumstance- I will say once again- that I pay quarterly in order to get the money back at the beginning of the year to pay my property tax in full for that year. The property tax on my house is close to 7k a year.. therefore, if I file quarterly and overpay, allow the government to hold my money and gain interest from it, and then at the end of the year, I get all the money I overpaid and my EIC, then I pay the taxes on my house. Could I put this money in a bank account instead of allowing the government to hold on to it and gain the interest myself? Of course I could. I UNDERSTAND that aspect you are saying. But, since 2009 I have been filing quarterly because they allow you to claim up to 3 dependents on your return now, when before you could only claim 2.. this allows me to have just enough money by paying quarterly to pay my humongous property tax bill, at the same time contributing to my government by allowing them to gain interest on my money, and avoiding any penalties. My tax lady is just fine, and we have worked this out in a manner which is beneficial, and satisfying, to me.

    I didn't disagree with anyyyy thing you said other than the fact that tax man WILL catch up to you. It may not be now, and it may not be for years.. but it will happen. Also, because I am self-employed, and claiming EIC, paying quarterly and keeping meticulous records also keeps me from being audited.

    Now, I'm sorry if this seems unnecessary to YOU.. but it makes perfect sense to me. I'm OKAY with allowing the government to gain interest from MY money. You are not. I'm okay with supporting my country in this way, as I am not making more than 48K a year, and I'm certainly not rich, I don't get taxed as much as those income brackets. So I hold my end up in that way.

    And Yes, it does depend on your individual circumstances. But in your case Diamond, MarvelGirl is right,- unless you would owe the government more than $1,000 worth of taxes, you can file at the end of the year. If you don't want to pay quarterly, and don't mind taking the (small) penalty for filing at the end of the year, that's fine if you don't feel like going through all of the shit with filing every 3 months.
    Last edited by BBWChanel; 04-07-2011 at 08:08 PM.

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    Default Re: Paying quarterly taxes vs. one big yearly chunk

    FYI to the op the penalty fee for me has always been like 50-60 bucks and even my banner year was still less than 100.

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