I will make instalment payments for the current year based on the estimated taxes payable. What if, during the course of the year, my net income increases dramatically (the taxes payable will increase too). What are the tax implications?

Allan Madan, CA
 Feb 20, 2014
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Installment payments should be made based on the expected taxes owing. If the taxes owing are larger than what you expected them to be, and you were paying installments based on the expected amount, then you will be charged with installment interest (and if the interest is more than $1,000, penalties can be charged as well).

 

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