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How do you pay your quarterly taxes?

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  • How do you pay your quarterly taxes?

    Hi fellow forum fans!

    One of WCI's recent posts got me thinking about how I pay my quarterly taxes.  I save up a bunch of money in a high yield savings account (which is also my emergency fund) and have the money drawn direct from there every quarter.  WCI mentioned that he uses his credit card to pay these high quarterlies, which makes perfect sense.  May as well get something back for all that money.  I've been missing out on collecting at least $1000/year in cash back by NOT charging my quarterlies.  I'm reluctant to mix these big payments (upwards of 30K per quarter) with my regular expenses.  I also don't have a credit limit that high.

     

    Can those of you who pay quarterlies comment on how you do so?  Do you charge in order to get some cash back?  If so, can you recommend any particular credit cards that allow really high limits with good cash back programs?  I'm thinking of opening up a card dedicated to paying ONLY my quarterlies...foolish or reasonable?

  • #2
    I would totally do that if you can.  The State of Illinois charged an additional two or two and half percent to utilize a credit card as a payment option for taxes.  An additional charge makes it unlikely to be worthwhile to use a credit card.

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    • #3
      I save mine up in the same account as my E-fund. Then I pay them using CC (more convenient, you get the float, and I pay 1.87% and get 2%). When the CC is due, I move the cash from savings to checking. Voila!

      It's far more interesting to discuss how to calculate the quarterly than how to pay it IMHO!
      Helping those who wear the white coat get a fair shake on Wall Street since 2011

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      • #4
        Pray tell how you calculate your quarterlies?  I'd imagine your monthly income varies more than mine, making it more challenging.   Nine years into my partnership, I know within 10-20K how much I'll make each year.  My CPA tells me roughly what to pay and I usually do a little more to be safe.  That said, I always overpay, which I realize is a waste, since I could be investing that extra money and letting it grow.  So, guide me kimosabe!  How should I calculate?

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        • #5




          It’s far more interesting to discuss how to calculate the quarterly than how to pay it IMHO!
          Click to expand...


          Just take all the money you made for the quarter and give it to the government.  Not so hard.

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          • #6




            Pray tell how you calculate your quarterlies?  I’d imagine your monthly income varies more than mine, making it more challenging.   Nine years into my partnership, I know within 10-20K how much I’ll make each year.  My CPA tells me roughly what to pay and I usually do a little more to be safe.  That said, I always overpay, which I realize is a waste, since I could be investing that extra money and letting it grow.  So, guide me kimosabe!  How should I calculate?
            Click to expand...


            I don't use what I made this year at all. I use what I made last year, multiply it by 110%, then divide by four and send that in as a quarterly.

            But I have a side account where I put a certain % (32% this year) of what I make and pay the quarterlies out of that. Come April, there should be some extra money in that account to pay the final federal tax bill and the state tax bill.

            I couldn't predict my income to $20K even before starting WCI.
            Helping those who wear the white coat get a fair shake on Wall Street since 2011

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            • #7


              I also don’t have a credit limit that high.
              Click to expand...


              Call and ask them to raise it. I often do 5k at a time. I've never been told no!

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              • #8





                I also don’t have a credit limit that high. 
                Click to expand…


                Call and ask them to raise it. I often do 5k at a time. I’ve never been told no!
                Click to expand...


                I got told no recently. But I did ask for an increase on a card with a $90K limit.
                Helping those who wear the white coat get a fair shake on Wall Street since 2011

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                • #9


                  I got told no recently. But I did ask for an increase on a card with a $90K limit.
                  Click to expand...


                  Interesting. At some point, this might drives the demand for charge cards.

                  Or, I once needed 3k more than my limit, so I simply paid before I spent (pushed from bank to card, as card company limited amount one can "over" or "pre" pay.)

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