Paying quarterly taxes all at once? Can you do it?

[McLovin]

Googled it but couldn’t find an answer. Probably because nobody would do what I did.
Anyways, this past April, instead of paying the first installment of my quarterly estimated taxes, I paid the entire estimated amount for the year.
At the time I thought for sure that’s ok with the IRS, but now I’m not so sure.
Are they still going to be looking for a 1040-ES, and some payment, each quarter? Will I be penalized for not filing and paying each quarter?

[wdfifteen]

They just want your money. When I didn’t pay the quarterlies I didn’t hear from them, I just paid the tax + penalties on April 15 and the IRS was happy. If they don’t care if you don’t pay your quarterlies on time I can’t imagine they would be upset if you pay them early.

[Zeke]

You can prepay your taxes. Quarterlies are an estimate and if you end up making more money and your quarterlies are short, you pay a small penalty. So, your accountant would suggest upping your amount if you start earning more than the estimated income for the year.

It's just money that you can't earn any interest on but they are happy to slap you with interest if you're short. Fuggers.

[john70t]

Originally Posted by Zeke

You can prepay your taxes.

It's just money that you can't earn any interest on but they are happy to slap you with interest if you're short. Fuggers.

Do we get interest/fines/penalties back on advance payments?
No? Ok then. Business as usual.

On the converse side:
I bet that will become the next huge scam against the government.
Corporations claiming they are owed huge amounts by the unlimited US Treasury reserves for billions of 'pre-deposited funds'.
Certain people. Bleeding the taxpayers dry.

[drkshdw]

Originally Posted by McLovin

Are they still going to be looking for a 1040-ES, and some payment, each quarter? Will I be penalized for not filing and paying each quarter?

You can pay the entire amount all at once if you feel like it but it should be paid in 4 payments, each with that quarters voucher according to my accountant. It shouldn't matter and it probably doesn't but come audit time it'll be a heck of a lot easier to explain things with the correct paperwork.

Now state taxes are another thing all together. Where I live quarters are treated like federal years in that you have to file your entire taxes, with 1040's for each quarter and they don't make future quarters available at the beginning of the year so you have no choice but pay quarterly. It's b.s. but part of the game.

[McLovin]

Originally Posted by drkshdw

You can pay the entire amount all at once if you feel like it but it should be paid in 4 payments, each with that quarters voucher according to my accountant. .

I don’t understand that, it seems inconsistent. If you pay it all at once, how can you also pay it in 4 payments?

I paid the entire year in April. There’s nothing left to pay this year.

[Sooner or later]

Originally Posted by McLovin

I don’t understand that, it seems inconsistent. If you pay it all at once, how can you also pay it in 4 payments?

I paid the entire year in April. There’s nothing left to pay this year.

That is what was said.

You are fine paying it all at once. Though rhe best method is to pay quarterly.

[Noah930]

Originally Posted by McLovin

I don’t understand that, it seems inconsistent. If you pay it all at once, how can you also pay it in 4 payments?

I paid the entire year in April. There’s nothing left to pay this year.

Send in 4 checks with 4 payment coupons, all at once?

[McLovin]

Originally Posted by Noah930

Send in 4 checks with 4 payment coupons, all at once?

Haha, that would have been one way.
But I didn’t send any checks in. My refund was so unexpectedly large, when I filed my taxes in April I applied my entire refund to the next year. It was enough to cover all my estimated taxes.

[KFC911]

I pay all my taxes at once...I structure most of my annual income (and all taxes) to occur in early Dec. But I'm probably talkin' peanuts compared to some here....circu$ peanutz .

[Mike80911]

Originally Posted by McLovin

Haha, that would have been one way.
But I didn’t send any checks in. My refund was so unexpectedly large, when I filed my taxes in April I applied my entire refund to the next year. It was enough to cover all my estimated taxes.

I have done exactly that several times and have never had an issue.

[jwasbury]

Of course you can prepay. The timing of your payments only come into play if you have underpaid, for purposes of calculating interest penalties.

Withholdings from wages are assumed to be paid evenly throughout the year for that underpayment interest penalty calculation, so you if you have flexibility with your W2 wages, this can be a method to top up your tax payments close to year end and avoid underpayment penalties.

[Tobra]

Why would you want to pay early?

[Tervuren]

Originally Posted by Tobra

Why would you want to pay early?

Peace of mind?

[McLovin]

Yea, peace of mind.
Many people like to defer paying as much as possible. I’m the opposite. I hate owing anything to anyone. I pay all my bills as soon as I get them, for example, even if I have 30 days.
Is it mathematically the best thing to do from dollars and cents? Probably not (but arguably it is).
But I’m retired early and living off my investment income so I guess I have some credibility on how to best manage dollars and cents.
This is the first time I’ve paid all up front, and I like it so far. Writing the quarterly checks was always a bit painful. Not having to think about it and write the checks is great.
It feels great knowing that as my accounts grow every month, the money is all mine, free and clear.
Since the quarterly tax money had to be kept in a very short term liquid manner (ie a regular savings account) it made no interest anyways.
Even though I’m just past 50, I’m in full preservation mode. No more significant risk for me. I did that in the past 10 years and am done.

[KFC911]

^^^^ We've about as different as can be....yet very similar in some respects.

No mo' apples ?

Enjoy the fruits...