- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
My guess is that 75% of them could avoid quarterly payments because they have regular income for which withholding can be elected. I don't like withholding on Social Security, because it's difficult to change or stop, but pensions are fine and the benefit of IRA distributions is that the tax withholding can be varied as the income changes.
The problem with these codgers is that they don't really see their income and dividends as income. They don't spend it, they live on their pensions and Social Security and let the investment income accumulate. Then they start losing competence (not to mention continence) and whoever is helping them with finances has the added burden of one more tax obligation.
Then there are those who might owe a couple thousand at the end of the year but would never get a bill from IRS because the penalty is under the criterion for charging it.
Consider the preparers who set these people up for quarterly payments in the first place. It was a profit center for many of them. They wanted to prepare those 1040-ES forms because they could charge extra for it. There was no incentive to suggest withholding as an alternative.
There may be a different preparer today. The client has to be re-educated that quarterly is not the only choice. If no one tells them the world has changed, they'll still be driving their Oldsmobile to the bank to deposit the dividend checks they refuse to put in a brokerage account.