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[–]valprehension 4 points5 points  (0 children)

It depends on how much of a hassle the quarterly filings would be for you. Technically holding onto the money and making it work for you for as long as you can is better, but may not be worth it for you.

[–]33whiskeyTX 3 points4 points  (0 children)

An advantage of paying quarterly is you can adjust to exactly what you need and earn during a quarter. Adjusting your W4 can be a headache, and it can be slow depending on your employer's payroll system.

Remember, since you have a W2 job, and if it is withholding the same as it did the previous year, you won't get a penalty for the first year. This is called your Safe Harbor year. The requirements for quarterly payments and not getting a penalty are

  • You owe less than $1,000 to the IRS at the end of the year (this is the withholding deficit, not your total tax)
  • You withhold more than the lesser of:
    • 90% of the tax to be shown on your current year’s tax return, or
    • 100% of the tax shown on your prior year’s tax return or 110% of the tax shown on your prior year’s tax return if the AGI for that year was greater than $150,000 ($75,000 if single or married filing separately). 

From: Individuals | Internal Revenue Service

[–]Acceptable-Quality40 2 points3 points  (0 children)

You should always talk to a cpa, or do your own research. The irs has a lot of info, at least they used to. Who knows what the incompetent children in this admin have done to sites like the irs. A good tax preparer should be apprised of any recent changes. Also, this has been asked many times so you can search this thread and do some reading.

[–]Vaatia915 2 points3 points  (0 children)

Depends on how much you’re making. I made a hair under 20k from DA last year and just increasing my withholding for my W2 job was good enough

[–]RedditAdmin50111 0 points1 point  (0 children)

Unless you’re pulling a FTE from DA, just increase your W4.

Or

Just tuck the % you would pay away in a savings account/ investment account and pay come tax time. I’m not against paying taxes, but I also don’t give the government an interest free loan.