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One more thing: 2009 estimated tax payment relief
February 13, 2009
I almost forgot to mention an odd little item of individual tax relief in the conference version of the stimulus monstrosity: limited relief for 2009 estimated tax payments for individuals with business income.
Most individuals avoid estimated tax underpayment penalties by paying in combined withholding and estimated payments either
- 90% of current year tax, or
- 100% of prior year tax (110% for those with prior year adjusted gross income over $150,000).
The bill has a provision for 2009 only reducing the 100% and 110% amounts to 90%. It applies to individuals with 2008 AGI up to $500,000 who had more than 50% of their 2008 income from a "small business." It leaves it up to the Treasury to certify what income is treated as from the a small business, defined as one with fewer than 500 employees. (Sec. 1212 of conference bill).
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Comments
You have to submit to the IRS quarterly payments equaling 90 per cent of what you estimate you'll make this year? That can't be right.
Posted by: 90 per cent of what?! | February 13, 2009 4:39 PM
Read it again: 90% of current year "tax," not current year "income."
Posted by: Joe Kristan | February 13, 2009 5:49 PM
When country needs to pay for all the costs of maintaining the new programs/infrastructures as well as pay for the solution to the next problem the government decides to "fix"; maybe the 90% of what you estimate you make, will be correct!
Posted by: Mike Phillips | February 16, 2009 8:16 AM
I'm having a heck of a time trying to find out if I need to pay estimated taxes if I had NO income last year. I went from being a stay-at-home mom to being a consultant for a company I used to work for. Should I just assume that I need to pay estimated taxes, and then pay 90% of my current year taxes?
Posted by: Jennifer | March 24, 2009 8:41 AM