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rated:
What does the IRS assess against you when you don't pay or late pay quarterly estimated 1040 payments? Best I can tell , it is around 3%?

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rated:
Looks like it's 4%.

Here's the relevant form:

https://www.irs.gov/taxtopics/tc306.html

and the instructions for that form:
https://www.irs.gov/pub/irs-pdf/i2210.pdf

On page 6 of the instructions is the worksheet to calculate the penalty. It has this formula to calculate the penalty:

Underpayment on line 1a (Number of days on line 12/365) 0.04

rated:
So it's an annual rate of 4%? So why doesn't everyone just not pay the quarterly payment if it's a loan at 4% and pay april 15?

Do you get on the IRS audit radar if you do it all the time?

rated:
rufflesinc said:   So it's an annual rate of 4%? So why doesn't everyone just not pay the quarterly payment if it's a loan at 4% and pay april 15?

Do you get on the IRS audit radar if you do it all the time?


Where can you get a guaranteed 4% return on your money?

rated:
jimbocobb said:   
rufflesinc said:   So it's an annual rate of 4%? So why doesn't everyone just not pay the quarterly payment if it's a loan at 4% and pay april 15?

Do you get on the IRS audit radar if you do it all the time?


Where can you get a guaranteed 4% return on your money?

mortgage rates are about there so the interest rate is not high at all.

rated:
In all the years I've been paying these (a couple decades) I've never gotten a late fee, even though I've paid it late several times. I think they really only assess those if it's really late, or missing. Just anecdotal. I've logged into my account several times and they show getting the payments late, too.

rated:
bluegreenturtle said:   In all the years I've been paying these (a couple decades) I've never gotten a late fee, even though I've paid it late several times. I think they really only assess those if it's really late, or missing. Just anecdotal. I've logged into my account several times and they show getting the payments late, too.
I can't get into my IRS account (transcript) without a non prepaid mobile phone. Do you have a contract mobile phone to be able to access your transcript?

rated:
bluegreenturtle said:   In all the years I've been paying these (a couple decades) I've never gotten a late fee, even though I've paid it late several times. I think they really only assess those if it's really late, or missing. Just anecdotal. I've logged into my account several times and they show getting the payments late, too.
Are you talking about the quarterly payment being a few days late? Don't think they care about that.
Or, are you talking about not paying quarterly taxes at all for income in the quarter in which is was received? I think that's what ruffles is talking about here.

rated:
it's a lot if you don't file by your extension deadline, and it goes up another ~6% after April 15th I think, at least if you weren't pretty close to meeting your full liability by April. Plus I think it's non-deductible so your investments better be doing pretty well to think about this as financing.

https://www.irs.gov/uac/newsroom/eight-facts-on-late-filing-and-...

rated:
xerty said:   it's a lot if you don't file by your extension deadline, and it goes up another ~6% after April 15th I think, at least if you weren't pretty close to meeting your full liability by April. Plus I think it's non-deductible so your investments better be doing pretty well to think about this as financing.


4% is fantastic loan rate vis a vis my rentals. But I definately will pay the full amt when I file apr 15th.

just worried that there's other penalties other than the 4%

rated:
so no one here regularly skips paying their quarterly taxes until they actually file april 15?

rated:
rufflesinc said:   so no one here regularly skips paying their quarterly taxes until they actually file april 15?
This is only JMHO. I respect other views:

Purposefully paying the IRS late strikes me as akin to tweaking the tail of a tiger. It's not merely the dollars. I want the IRS, should anything ever arise, to view me as "squeaky clean".

When I was in high school we were assigned compositions to write for English class. My writing was not exemplary, so what I did was to check the spelling of every word in my work, when there was any question whatsoever, using a dictionary. In those days we used dictionaries for such things. I didn't want the teacher to be expecting and correcting careless misspellings, thereby attracting more attention to and reason to dwell upon my not-so-great prose.

It's the same idea with the IRS. I don't want 'em to go into a questionable situation, should such ever arise, with the impression I'm a chronic scofflaw. I want the benefit of the doubt which, IMO, has worth. On-time quarterly payments are an inexpensive way to help create the impression I'm an honest person who simply made, should something questionable arise, an uncharacteristic error.

rated:
What IRS employees have been telling me for years:
If the 2210 fees are less than $100 and you don't file the 2210, we won't bother with it.

What I've been telling clients for years:
Why assess a fine on yourself? If the IRS really wants the fine, they'll send you a letter and you can mail them a check.


rated:
I've occasionally sent the check a week late, once or twice maybe a month late. I have never gotten assessed any interest or penalty. But then, I always backdate the check for a few days before the due date.

rated:
shinobi1 said:   rufflesinc said:   so no one here regularly skips paying their quarterly taxes until they actually file april 15?
This is only JMHO. I respect other views:

Purposefully paying the IRS late strikes me as akin to tweaking the tail of a tiger. It's not merely the dollars. I want the IRS, should anything ever arise, to view me as "squeaky clean".

It's the same idea with the IRS. I don't want 'em to go into a questionable situation, should such ever arise, with the impression I'm a chronic scofflaw. I want the benefit of the doubt which, IMO, has worth. On-time quarterly payments are an inexpensive way to help create the impression I'm an honest person who simply made, should something questionable arise, an uncharacteristic error.

I don't have a solid opinion on this, just trying to feel my way around. I guess your last graf goes back to question. Does simply not paying quarterly but paying the full amount plus interest at filing actually raise a red flag?

The IRS specifically comtempltes this situation in a guide paper so I can't imagine they would publish it and then use it to red flag you

Do you not take a large deduction you are allowed to take because others abuse it and taking it will raise red flag?

rated:
taxmantoo said:   What IRS employees have been telling me for years:
If the 2210 fees are less than $100 and you don't file the 2210, we won't bother with it.

At 4%, that's $2500 in late taxes.


rated:
rufflesinc said:   
taxmantoo said:   What IRS employees have been telling me for years:
If the 2210 fees are less than $100 and you don't file the 2210, we won't bother with it.

At 4%, that's $2500 in late taxes.



Could be even more? If you owed $2500 for1 yr, that's $100 ..........but estimated taxes are due quarterly so the average delinquency is 6 mos. so you could have $5K in late taxes.

rated:
kaneohe said:   rufflesinc said:   
taxmantoo said:   What IRS employees have been telling me for years:
If the 2210 fees are less than $100 and you don't file the 2210, we won't bother with it.

At 4%, that's $2500 in late taxes.



Could be even more? If you owed $2500 for1 yr, that's $100 ..........but estimated taxes are due quarterly so the average delinquency is 6 mos. so you could have $5K in late taxes.

Correct, which is more in favor of the taxpayer

rated:
rufflesinc said:   so no one here regularly skips paying their quarterly taxes until they actually file april 15?

I accidentally used last year's (2015) estimated slips to find the amount and paid on eftps with the correct date/year. I realized the amount was wrong before the last payment date (1/16) and paid the balance. I suppose I'll report back as to what happens if I remember.

I know I've occasionally been late by a day or two with no issues/fines.

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