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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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I've underpaid estimated taxes on my anticipated total

Customer Question

I've underpaid estimated taxes on my anticipated total income from investments during the year, because I'll receive a deferred comp payment of about $40K from a former employer in November The payment is reported on a W2 and taxes withheld as if this and SS were my only income. The payment pushes me into a higher tax bracket and leaves me $10K down from my current estimated tax. The comp payment is technically at risk as an unsecured debt.
Can I solve this by asking my former employer to withhold an additional $10K from the deferred comp?
If this won't work I'm planning to increase my estimated tax payment for at least January and pay a penalty.
Is this correct?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

Yes - you may ask your employer to make withholding.
Generally - as that is considered a supplemental wages - not regular wages - your employer should withhold income tax at flat 25% rate without your request.
But you may verify if they plan to make such withholding.