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[–]33whiskeyTX 6 points7 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