Episode 12, The Marshall Art of planning for taxes on bonuses OR making sure Uncle Sam doesn’t crash the vaca!

Safe harbor IRS tax withholding rules do exist to avoid an estimated-tax penalty.  You can avoid a penalty if you 1) owe less than $1,000 after credits and withholdings; OR 2) meet a safe harbor if in the current year you paid a) at least 90% of the current year tax you owe; OR b) at least 100% of last year’s tax liability. Note that if your adjusted gross income is $150,000 ($75,000 for married filing separately), the safe harbor noted in b) relating to last year’s tax liability rises to 110%!