under the default method for computing underpayment penalties it is assumed 1/4 of your 2024 taxes were due each period. You will be subject to penalties for the first quarter unless you use the Annualized installment Income Method on page 3 of the 2210
ways to avoid penalty and/or no need to use the AIIM
if Federal withholding and
- timely estimated tax payments equal or exceed 90% of your 2024 tax or
- timely estimated tax payments equal or exceed 100% of your 2023 tax (110% if your 2023 adjusted gross income was more than $150K) or
- the balance due after subtracting taxes withheld from 90% of your 2024 tax is less than $1,000 or
- your total taxes are less than $1,000
this means that withholdings and estimated tax payments for the 1st quarter - 1/1-3/31 for option 1 must be 22.5% of your 2024 tax or $25% (27.5% if agi >$150K) of your 2023 tax
state laws differ
