Question

In January, Ms. NW projects that her employer will withhold $25,000 from her 2019 salary. However, she has income from several other sources and must make quarterly estimated tax payments.

Compute the quarterly payments that result in a 2019 safe-harbor estimate assuming that her 2018 AGI was $176,000, and her tax was $47,200.

Compute the quarterly payments that result in a 2019 safe-harbor estimate assuming that her 2018 AGI was $139,000, and her tax was $36,800.

Answer 1

Estimates tax payments	Scenario 1
AGI	176,000
Tax	47,200
Estimated tax safe harbor @110% of prior year tax paid	51,920
Tax withheld	25,000
Estimated tax to be paid in quarterly instalments	26,920

If the AGI for 2018 was less than 150,000, then the tax is estimated at 100 % of tax paid in 2018:

Estimates tax payments	Scenario 2
AGI	139,000
Tax	36,800
Estimated tax safe harbor @100% of prior year tax	36,800
Tax withheld	25,000
Estimated tax safe harbor to be paid in quarterly instalments	11,800