If you don’t pay enough estimated tax, or don’t pay on time, you’ll have to pay a penalty. It’s best to avoid this penalty, of course — but you don’t have to lose sleep over it. The penalty is equivalent to nondeductible interest on the amount you underpaid, for the period of the underpayment. If … Continue reading “Penalty for Underpayment”
Choose the appropriate method from among those described on this page to determine the amount of estimated tax to pay. Prior year safe harbor The same “prior year safe harbor” you use to determine whether you have to pay estimated tax (see Who Must Pay) can be used to determine how much you have to … Continue reading “How Much to Pay”
The general rule is that you have to pay estimated tax if your withholding and other tax credits are less than 90% of your tax liability (including the amount of alternative minimum tax you owe, if any). But there are two important exceptions: Tax due less than $1,000 You don’t have to make federal estimated … Continue reading “Who Must Pay”
You can’t make a regular (non-rollover) contribution to a traditional IRA or a Roth IRA unless you or your spouse have qualifying income. This page explains what types of income count as qualifying income for this purpose. Reminder: Your IRA contribution or deduction may be limited by other rules: This page is only about the rules defining … Continue reading “Qualifying Income for IRA Contributions”
