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Quarterly taxes for first half year out of residency?

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  • Quarterly taxes for first half year out of residency?

    Do you owe quarterly taxes as an independent contractor on your first HALF year?

    Let me explain the situation:

    Make $50k/2 for first half of year with regular withholdings.

    Make >$200k/2 for second half of year.

    Last year my wife worked so our income was about $90k.

    If I understand correctly I need to pay 110% my 2015 taxes divided by 4 payments and I am already behind (April 18th deadline)!

    This seems unfair that I need to pay tax on money I will make but have not yet.

    Reading the IRS publication, I can't find an exception to having to pay BEFORE YOU MAKE THE MONEY if you make a lot of money in the second half of the year.

     

     

  • #2
    You have interpreted the rules correctly. You need not worry about quarterly taxes now for what you anticipate making later in the year. Who knows, you might not make what you think later?

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    • #3
      There actually is an exception called "annualizing". You fill out an extra schedule showing what quarters you earned what income and calculate when your payments are due based upon the timing of your earnings. See page 4 of form 2210.
      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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      • #4
        Doesnt really matter at all in your first year, matters next year. There are lots of scenarios and worksheets for sporadic income, etc...You're correct, they do not care about taxing money you havent yet made. You can either start paying them after you make 1099 income (sept/jan) or just do it with your taxes next year as there is no penalty the first year.

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        • #5
          Just be sure not to spend the money you will have to pay next April.
          Helping those who wear the white coat get a fair shake on Wall Street since 2011

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