We do this every year. DH pays quarterly taxes on his fellowship, I get a bonus every November and the size of my bonus varies wildly - it could be anywhere from 2-10% of our household gross for the year. We just increase our 4th payment each year and go back to paying the normal amount for the next year. I'm not sure if the normal amount assumes no bonus or small bonus. I let DH work that out with the accountant.

You have a reasonable explanation for this (unexpected extra earnings). Just send in a check now to cover that, as an estimated tax payment. Then pay as usual next year in terms of withholding.

it also depends on your total earnings.

You are safe harbor end if either you paid estimated at least what was necessary to pay your tax liability in full last year OR if you pay in estimated taxes at least 90% of your total liability. In other words if you font adjust for next year that is okay, but only if still have paid at least 90% of your actual tax liability.

I do think it may impact your safe harbor payments for next year. Probably easier to have it taken from your husbands withholding.

Anonymous wrote:I'm a part time consultant with a small steady income. To cover the taxes for this, my husband (we file jointly) has additional withholdings from his paycheck that cover the total annual tax liability for our family so that I don't have to deal with quarterly estimated tax payments. However, this fall I had an unexpected project come up that paid me enough to result in another $7K of tax liability (we think, the tax calculations are a bit complicated because of our various income sources). I was not paid for this work until october-november. We are now trying to figure out how to deal with the tax issue. We have cash sitting ready to pay to the IRS but aren't sure exactly how to do this.

It seems like our options are:
1) send one estimated tax payment for the final quarter. However, would this someone make us required to do so in future years? My income for next year is likely to be even more sporadic and most will come in in the later part of the year, so there is no way to easily calculate quarterly payments.
2) have the majority of my husband's paychecks for the month of december withheld. This would be fine for us since we could just use the cash on hand to cover the lost paychecks.

Is there any option I'm missing? Also, are there any really good tax calculators out there to figure out 2014 taxes for complicated situations (married, kids, self employment, mortgage deductions, business income for a rental property?)

Whether or not you are required to pay estimated taxes has nothing to do with whether you've paid in the past. You just have to make sure that one way or another you've handed over enough to cover your taxes for the year in question. Makes no difference which way. (I think there's something where, if you're behind in your payments, you can avoid penalties by paying via withholding versus via est. tax. But it sounds like you're current: You didn't earn the extra income until Q4)

If you look at the instructions for 1040 ES there's a form to calculate what you'll owe. There's also Turbo Tax etc.

I'm a part time consultant with a small steady income. To cover the taxes for this, my husband (we file jointly) has additional withholdings from his paycheck that cover the total annual tax liability for our family so that I don't have to deal with quarterly estimated tax payments. However, this fall I had an unexpected project come up that paid me enough to result in another $7K of tax liability (we think, the tax calculations are a bit complicated because of our various income sources). I was not paid for this work until october-november. We are now trying to figure out how to deal with the tax issue. We have cash sitting ready to pay to the IRS but aren't sure exactly how to do this.

It seems like our options are:
1) send one estimated tax payment for the final quarter. However, would this someone make us required to do so in future years? My income for next year is likely to be even more sporadic and most will come in in the later part of the year, so there is no way to easily calculate quarterly payments.
2) have the majority of my husband's paychecks for the month of december withheld. This would be fine for us since we could just use the cash on hand to cover the lost paychecks.

Is there any option I'm missing? Also, are there any really good tax calculators out there to figure out 2014 taxes for complicated situations (married, kids, self employment, mortgage deductions, business income for a rental property?)