What is the penalty for being late on estimated quarterly taxes?

[dorethawsp]

As fate would have it in these times, I'm still waiting for the check I was going to use to pay my quarterly taxes... Is it a big deal if I'm a few days to a week late on these?

[calle mayor]

No big deal. The penalty for underpayment of estimated tax is calculated based on the 8% annual rate right now. This translates into 0.0219187% times number of days late times the amount of the underpayment for the time period in question.

[Poker CPA]

Real men don't pay estimated taxes. We wait until the last possible moment, MIDNIGHT APRIL 17th. The interest charge is about 4% times times the tax due on April 17th. The IRS likes to call it a penalty, but its just simple interest. So if you owe $10,000 on April 15th, the interest is $400, give or take. And if you pay in to much, the IRS doesn't pay you interest. Real men don't fall for this trick, we invest OUR money wisely. (Except the guys who left it in Neteller).

[ilikeaces86_]

[ QUOTE ]
Real men don't fall for this trick, we invest OUR money wisely. (Except the guys who left it in Neteller).

[/ QUOTE ]


Why u gotta hate [img]/images/graemlins/frown.gif[/img]

[FatalError]

I emailed my accoutant about this to confirm (because i don't trust anything i read about taxes on 2p2) but if this is true i'm gonna stop paying quarterlies because if it's 4% simple interest, any donk could do better than that via ing direct

[Poker CPA]

I admit I hate taxes. Guilty as charged

[BigBiceps]

[ QUOTE ]
As fate would have it in these times, I'm still waiting for the check I was going to use to pay my quarterly taxes... Is it a big deal if I'm a few days to a week late on these?

[/ QUOTE ]

Sometimes they don't notice. Especially if you might be using the annualized method. This is for the IRS.

The state always seems to notice (and sometimes even when they are wrong they give a penalty). It is usually under 20 bucks so I just pay instead of bothering with them.

[Poker CPA]

The interest is about 8%, but the math is right (4% times tax due), give or take. And the IRS does NOT pay you interest if you overpay. The calculation is just to complex for this forum, Sorry tried to keep it simple.

Good Luck

[Poker CPA]

Good point about the state, its higher, so need to review each individual state.

Bad preparers try to get you to overpay your taxes, so they can be the BIG hero with refunds. I think the NY DOJ took H&R Block to court over this practice and Block took BATH over it. How's that for LOVE Brother. Make your client pay in taxes so they can be heros. I'll take the hate, thank you.

[1p0kerboy]

PokerCPA,

I know you are probably terribly pressed for time right now, so if you can't reply to my request I certainly understand.

Basically you are saying that you have to pay a penalty for not filing quarterlies, and that penalty works out to be about 4% of the tax owed. If we are hanging onto that money over the course of a year, then (hopefully) our interest-bearing account is pretty much covering this.

I think I have heard you say before that the IRS uses some sort of scare-tactic wording to get players to pay the quarterlies. Can you quote these and explain how they are wrong? (Or if you have done this before then link the thread).