Estimated taxes: Can I just make one big payment on the 4th payment due date?

[Anonymous]

The IRS provides for estimated taxes to be paid quarterly. But, they don't know when I earned the income. Can I just wait until the 4th payment due date to pay all estimated taxes at once?

[Anonymous]

Sure, but if you do owe anything, you will get hit with penalties and interest.

[Anonymous]

Anonymous wrote:The IRS provides for estimated taxes to be paid quarterly. But, they don't know when I earned the income. Can I just wait until the 4th payment due date to pay all estimated taxes at once?

Yes, if you document that all of your income was from the 4th quarter (if not, you may have to pay interest). Assumption is that your income is a constant throughout the year, unless you state otherwise and document.

[Anonymous]

Even if I make all the income near the 4th payment due date? (My income is very unstable -- not a theoretical question). Or, do I have to just anticipate future income and spread payments quarterly (to avoid interest and penalties)?

[Anonymous]

OP here. The 11:09 post is applicable. If I can document, fine.

[Anonymous]

Anonymous wrote:Sure, but if you do owe anything, you will get hit with penalties and interest.

FYI though, unless you are talking a huge sum of money, the pentalties and interest will be very small.

[Anonymous]

I think it's correct that you don't have to pay estimated taxes on the money until the quarter that you earn it. However, I think to avoid penalties you might have to break down both income and deductions by the quarter they occurred in.

[Anonymous]

As long as you pay enough, you'll be fine. They don't go back and see if you paid exactly 25% each quarter. I pay what
I can when I can, usually in two installments, sometimes just one prior to April 15. The only time you pay penalties is if you underpay estimated taxes (and they are minor).

[Anonymous]

Anonymous wrote:As long as you pay enough, you'll be fine. They don't go back and see if you paid exactly 25% each quarter. I pay what
I can when I can, usually in two installments, sometimes just one prior to April 15. The only time you pay penalties is if you underpay estimated taxes (and they are minor).

This. The only way they can know when you earned it is if they audit you. When I was self-employed, I usually paid on time each quarter, but some years I skipped a quarter and doubled up on the next. Never had a problem.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Sure, but if you do owe anything, you will get hit with penalties and interest.

FYI though, unless you are talking a huge sum of money, the pentalties and interest will be very small.

this. it's fine. As long as you pay the penalty and interest there isn't a problem.