tax underpayment penalty (by elliot [RI]) Jul 23, 2017 3:29 AM
tax underpayment penalty (by David [NC]) Jul 23, 2017 4:29 AM
tax underpayment penalty (by Jim in O C [CA]) Jul 23, 2017 4:46 AM
tax underpayment penalty (by NE [PA]) Jul 23, 2017 4:50 AM
tax underpayment penalty (by Bill [NC]) Jul 23, 2017 6:13 AM
tax underpayment penalty (by razorback_tim [AR]) Jul 23, 2017 6:14 AM
tax underpayment penalty (by NE [PA]) Jul 23, 2017 6:31 AM
tax underpayment penalty (by RathdrumGal [ID]) Jul 23, 2017 11:29 AM
tax underpayment penalty (by LisaFL [FL]) Jul 23, 2017 1:41 PM
tax underpayment penalty (by NE [PA]) Jul 23, 2017 1:53 PM
tax underpayment penalty (by Robin [WI]) Jul 23, 2017 7:08 PM
tax underpayment penalty (by LisaFL [FL]) Jul 24, 2017 4:09 AM
tax underpayment penalty (by David [MI]) Jul 24, 2017 5:54 AM
tax underpayment penalty (by Marv [IL]) Jul 24, 2017 6:38 AM
tax underpayment penalty (by Wilma [PA]) Jul 24, 2017 2:29 PM
tax underpayment penalty (by Ray-N-Pa [PA]) Jul 26, 2017 10:42 AM
tax underpayment penalty (by elliot [RI]) Posted on: Jul 23, 2017 3:29 AM Message:
I received notice of underpayment penalty from IRS.. Never had to pre-pay tax before.. A Form 2210 (or IRS) is used to calculate the penalty..
I do my own tax with software, and the software didn't flag me for that..
Do you rich LLs just write a check to whatever your CPA tells you? Anyone does his/her own tax and send quarterly or whatever proper way to avoid the penalty?
Rent has gone way up while expenses continue to go down. I am anticipating more taxes. Probably it is better off writing couple small checks than a big one plus penalty at end of year. --73.16.xxx.xxx |
tax underpayment penalty (by David [NC]) Posted on: Jul 23, 2017 4:29 AM Message:
I use an accountant. I track everything via spreadsheets or quickbooks and give them everything. I pay quarterly estimated taxes. Even with doing this for years, my numbers never "agree" with the accountant numbers. There is some kind of black magic that happens with taxes and I can never figure out what I owe. I feel like I make the same about year after year but what I owe keeps changing. I'd give my left nut for a flat tax that I could understand. --65.188.xxx.xxx |
tax underpayment penalty (by Jim in O C [CA]) Posted on: Jul 23, 2017 4:46 AM Message:
I'm not a CPA. When I first stated my bookkeeper had me over withhold on my W-2 income to account for the net income I would earn from my rentals. I believe as long as you pay in 90% of your tax liability there is no penalty.
As my rental income increased my CPA then had me start making quarterly estimates. As the tax year progresses and I see my guesstimates for income increase I increase my estimates or if I see my expenses have increased I reduce my estimates.
Notice I went from a bookkeeper to a CPA. My bookkeeper made a stupid mistake when I first started and I was audited by the IRS for 3 years in a row. I would rather have a root canal! Two of the three years my CPA and I had to teach the auditor tax law 101 because they were totally incompetent. --75.22.xx.xxx |
tax underpayment penalty (by NE [PA]) Posted on: Jul 23, 2017 4:50 AM Message:
Elliot, don't you have like 140 units? How have you gotten away with not paying quarterly taxes?
My CPA has me send them in quarterly, because they require it. If I ever get a refund instead of owing at the end of the year, I just put a large portion towards next year automatically.
The IRS is a pack of wolves I want to keep well fed. --74.47.xxx.xxx |
tax underpayment penalty (by Bill [NC]) Posted on: Jul 23, 2017 6:13 AM Message:
I am the treasurer for my church. I let the CPA do all the quarterly taxes. Easier that way. --76.0.xxx.xxx |
tax underpayment penalty (by razorback_tim [AR]) Posted on: Jul 23, 2017 6:14 AM Message:
The easiest thing to do is to make safe harbor quarterly payments. Whatever your total tax amount was last year be sure you pay that in before the end of this year. Equal quarterly payments are the easiest and least complicated. Otherwise there is still some chance you would have a penalty. If you have W-2 income take into account your annual with holdings when calculating what your quarterly payment would be.
For example if last year's total tax amount was $20,000 and you have no withholding from a w-2 job then you would pay $5000 quarterly. If you have a w-2 job and your withholding will be $12,000 then pay $2,000 quarterly. You may still owe when you file your return but you shouldn't owe a penalty. --70.178.x.xx |
tax underpayment penalty (by NE [PA]) Posted on: Jul 23, 2017 6:31 AM Message:
Elliot, I run 2 LLC's, my rental llc just kinda chugs along. My flip llc has feast and famine years. A few years ago, I had a banner year for my flip llc and my accountant tried bumping up my quarterly payments to around 5 grand and I told him NO WAY! (may not be much for some folks, but that would've been estimated payments higher than any taxes I've ever paid)
I had to explain to him that the flip llc can do incredible or do nothing and if I commit to that 5 grand quarterly, it could crush me if I don't flip houses.
The rental llc is ran "cash in, cash out", so whatever is in there at the end of the year or quarter can easily or paid towards taxes due.
So now we just do books quarterly and send in what's due then. --74.47.xxx.xxx |
tax underpayment penalty (by RathdrumGal [ID]) Posted on: Jul 23, 2017 11:29 AM Message:
We pay estimated quarterly payments. Our CPA tells us what to pay based on prior years earnings. Yep, there is a penalty if you do not have enough withheld. Sounds lke the IRS finally caught up with you. The audit letter will be arriving shortly. Sorry. --70.199.xxx.xx |
tax underpayment penalty (by LisaFL [FL]) Posted on: Jul 23, 2017 1:41 PM Message:
I believe the rule is so long as you pay in quarterly an amount equal to 100% of the precious year's liability you're in compliance. It's 110% for business income. --173.170.xxx.xxx |
tax underpayment penalty (by NE [PA]) Posted on: Jul 23, 2017 1:53 PM Message:
LisaFL, it may be true if you are only paying estimates based on last years numbers.
I do quarterly paperwork with my accountant and pay varying amounts each quarter based on performance.
Right or wrong I don't know, that's just how he's been setting it up for a few years now. --74.47.xxx.xxx |
tax underpayment penalty (by Robin [WI]) Posted on: Jul 23, 2017 7:08 PM Message:
You've just encountered a big unfair tax policy. It isn't enough to pay any taxes due by April 15th--you're supposed to pay as you go!
It's a nightmare for us--we're ramping up with the rentals but DH's 9-5 income went from awesome to diddly-squat. Plus we have rentals in two states. Try figuring THAT mess out! You can pay estimated taxes quarterly, but then need a couple new roofs and suddenly the IRS owes YOU money. I'm just going to write a ballpark check each quarter and see where we end up. --204.210.xxx.xxx |
tax underpayment penalty (by LisaFL [FL]) Posted on: Jul 24, 2017 4:09 AM Message:
NE,
Your way is right. The other way is just no fail. So even if your way turned out to have underestimated and you paid in at least as much as you had the prior year there is no underpayment penalty. Your way is likely to be more accurate. --173.170.xxx.xxx |
tax underpayment penalty (by David [MI]) Posted on: Jul 24, 2017 5:54 AM Message:
what is the penalty? If it is 4-6% (annualized) as I've previously read, that's not so bad interest loan! --12.156.xxx.xx |
tax underpayment penalty (by Marv [IL]) Posted on: Jul 24, 2017 6:38 AM Message:
Generally you must pay in more than your tax was prior year. also...
If your 2016 adjusted gross income was more than $150,000 ($75,000 if you are married filing a separate return), you must pay the smaller of 90% of your expected tax for 2017 or 110% of the tax shown on your 2016 return to avoid an estimated tax penalty. --173.15.xx.xxx |
tax underpayment penalty (by Wilma [PA]) Posted on: Jul 24, 2017 2:29 PM Message:
I do pay quarterly, but I make sure that I make the "safe harbor" amount of 100% of my tax burden for the most recent tax return. It bugs me when there is too much sent, like last year, but I just apply that to the first quarterly payment, anyway. --71.175.xxx.xxx |
tax underpayment penalty (by Ray-N-Pa [PA]) Posted on: Jul 26, 2017 10:42 AM Message:
Income is up while expenses are down..........sounds like a nice problem to have.
If you are not going to hire an accountant, then the fee is just the cost of doing business. You might be happy just guessing, but I would encourage you to hie that CPA --24.239.xx.xxx |
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