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Tammy F.
Tammy F., Not an active Expert
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Estimated quarterly tax payments vs. more tax taken out of salary

Customer Question

I have a full-time job and in addition to that, this year my two brothers and I are each receiving $2,500 per month from a building which we own (after my mother's passing), so that will total another $30K per year in income. My question is, instead of setting up quarterly estimated tax payments to the IRS, can I simply ask the Payroll Dept. at my full-time job to take out more Federal and State taxes from my bi-weekly paychecks, so that at the end of the year I would have paid the taxes on the additional $30K. Does the IRS care how I pay them their money?
Submitted: 11 years ago.
Category: Tax
Expert:  Tammy F. replied 11 years ago.

 Yes.  You can do this.  If you don't take out enough, you could end up paying an underpayment penalty so you will want to compute the correct amount before you begin.


The IRS does not care how they get their money.  This would be a fine way to handle it.


Let me know if you have more questions.

Customer: replied 11 years ago.
Reply to Tammy Falkner's Post: Thank you. Do you think my payroll dept. would be able to compute this for me? If I tell them to hypothetically add another $30K to my annual income, could they quickly compute how much more tax should be taken out each bi-weekly check? I had just been worried that the IRS DEMANDS quarterly payments, but if you are saying that the IRS doesn't care as long as they have their monies due at the end of the year, then I will go with this much easier method. Thank you.
Expert:  Tammy F. replied 11 years ago.

 They could compute it for you, but they are not required to do so.  I suggest that you ask them to take out a set dollar amount rather than a percentage.  Just assume that you will be paying the amount that is your tax rate for the year and average out the dollars.  Ask them to withhold this additional amount.  If you are taxed at the rate of 27%, ask them to withhold 27% of the 2500.


Let me know if you have more questions.

Tammy F., Not an active Expert
Category: Tax
Satisfied Customers: 9168
Experience: Not an active Expert
Tammy F. and 3 other Tax Specialists are ready to help you
Customer: replied 11 years ago.
Reply to Tammy Falkner's Post: Hello again. I just realized I need a little more information regarding the above. Seeing as this additional $30K income is not Payroll income, does my Payroll Dept. still have to increase my biweekly payments to FICA, Medicare, and New York State Disability? Or do they just deduct more monies from my Federal, State and Local Taxes? Thank you.

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