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Jon Andrews
Jon Andrews, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 3118
Experience:  I deal with all levels of tax planning and controversy - from the ordinary to the complex.
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Last year, in February, my husband lost his job making $320,000

Customer Question

Last year, in February, my husband lost his job making $320,000 a year in New York City. He received severance for a time and then did some consulting work. So income taxes were taken out of his regular pay but he received 1099s for the consulting jobs. He made over $500,000 for the year. Because I knew that taxes were not being withdrawn from the money he made consulting, I set aside money to pay the taxes this month. They were high but I paid that bill and thought I was done. Now my husband has a new job making $220,000 and we have moved to Nebraska. I recently completed our taxes using Turbo Tax. I did not notice until today that we were asked to pay estimated taxes. Frankly I didn't even know what that meant. We are being asked to pay $11,000 per quarter. We don't have that money. What do we do? We most certainly won't owe that much next year. Please help. Thanks.
Submitted: 6 years ago.
Category: Tax
Expert:  Jon Andrews replied 6 years ago.

Estimated tax payments are suggested, not required, based on the information provided for the current tax year. In other words, based on the information you input for 2009, TurboTax is suggesting that you make estimated payments for 2010. Since your situation will be different for 2010, you are not required to make those estimated payments.

 

jon

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Customer: replied 6 years ago.
But if we don't make payments and we do end up
Expert:  Jon Andrews replied 6 years ago.

You can adjust your payments throughout the year. So, if it looks like the withholding from his new job is going to be sufficient, you do not need to make any payments. But, if it looks like you are going to be short, you can go ahead and make a payment. It does not have to be $11,000 per quarter and not each quarter has to be the same. You could do $0 for the first quarter, $0 for the second quarter and then $3,000 for the third quarter. It just depends on what your tax situation is each quarter.

 

jon