estimated tax ?

lowkey · #1 03-31-2007, 06:29 PM

What is the point of pro poker players doing estimated tax payments when you know exactly how much you made in the quarter? What am i missing here?

poorolrich · #2 04-01-2007, 12:39 AM

I believe your estimated tax is based on your yearly income but I'm not sure. Never paid it when I was advised to do it, just paid the full amount every year in full--no problems. Of course that was a long time ago when I was paying taxes--now I just fly under the radar.

plasphemy · #3 04-01-2007, 12:57 AM

If your tax due is over $1000, you'll get hit with an underpayment penalty if you don't prepay.

The underpayment penalty is about 5.2%

SlowHabit · #4 04-01-2007, 09:07 PM

Pay your estimate.

If you don't, there's a penalty (interest of your payment) until the next quarterly estimate is due. If by then you still haven't pay, then more penalties.

ilikeaces86_ · #5 04-02-2007, 11:15 AM

[ QUOTE ]
Pay your estimate.

If you don't, there's a penalty (interest of your payment) until the next quarterly estimate is due. If by then you still haven't pay, then more penalties.

[/ QUOTE ]

Poker CPA · #6 04-02-2007, 11:52 AM

There are no penalties, just an interest payment. It comes out to about 8% on an annual basis. Its confusing and the IRS tries to scare the crap out of you with their "mumbo jumbo" wording. THERE IS NO REQUIREMENT TO PAY ESTIMATED PAYMENTS.

To do a quick calculation of the interest (the IRS calls it a penalty), its 4% times tax due, give or take.

The scope of your question is to broad to give a complete answer, in this type forum. But if your tax is $5,000, just pay on April 15th. The interest will be about $200, which I'm sure you can makeup on prudent investing or cardplaying.

This issue is EZ for an experienced preparer, but its just to complex to explain in full. I hope this helps.

fluorescenthippo · #7 04-03-2007, 02:02 AM

[ QUOTE ]
If your tax due is over $1000, you'll get hit with an underpayment penalty if you don't prepay.

The underpayment penalty is about 5.2%

[/ QUOTE ]

5.2% of what? what you originally owed?

fluorescenthippo · #8 04-03-2007, 02:05 AM

and are these estimates only for federal taxes? i believe thats what they said but i dont have the forms with me. so you dont need to pay state tax until the year ends?