Hello. I have a question regarding estimated taxes that I’m hoping someone can help me out with. I just completed my fellowship training and had moonlighted from January to July this year. Due to underestimation of moonlighting earnings (I got more shifts later on in the period), I ended up paying lower estimated taxes for the 1st quarter than I did for the 2nd quarter. Now that I’ve completed moonlighting for the year, I’ve realized that I made even more earnings than initially estimated. I am concerned that paying higher estimated taxes for the 2nd quarter compared to the 1st already exposes me to tax penalties, and that paying even higher estimated taxes for the 3rd and 4th quarters would incur even more penalties. I am pretty much confident that I’ll end up paying more taxes in total this year compared to last year due to anticipated attending income I expect to generate during the later part of this year. How should I proceed?
I appreciate any insight you guys might have on this. Many thanks in advance.
- Pay the same amount in the 3rd and 4th quarters as I did for the second, and then pay the balance during tax filing season? Would there be a way to avoid the penalty for making a smaller payment in the 1st quarter? Would the fact that I’ll have paid more total taxes this year compared to last year automatically prevent the penalty, or would I have to fill out the form explaining that I had unequal self employment income for the different quarters (I forget what the form is called, and I hear it’s a pain to fill out, lol). Is there a way to avoid filling out this form?
- Pay the even higher estimated taxes for the 3rd and 4th quarters? Would I be able to avoid the penalty doing this?
I appreciate any insight you guys might have on this. Many thanks in advance.
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