What to do re: Estimated Tax
Our adjusted gross income in 2006 was around $35,000, and this year would have been the same, except for two new things:
1) I received about $17,000 in academic grants/fellowships that were not pre-taxed
2) I started a small internet business in May 2007 and profited approximately $4,000. Total revenue was around $35,000 and expenses (the items I sold) cost around $31,000
Our W2s will reflect withholdings just on the $35,000 of wages. With approximately $21,000 in additional income, we obviously will have underpaid.
- Is it important that we pay an estimated tax for the last quarter by Jan. 15th, and then assume we will be penalized for not paying the ET for the 2nd and 3rd quarters?
- Any guesses as to the range of additional tax we will owe?
- What will happen if we do our taxes as normal (no pre-ET payments) and cut a check for the underpaid amount?
I should add that my internet business is on hold as of Dec. 1st, and the additional income we experience this year is unlikely to repeat next year.
Last edited by joseph : 12-05-2007 at 01:47 PM.