How do I pay my taxes quarterly?

This answer was provided by Mark Misselbeck, Levine Katz Nannis & Solomon PC, Needham.

Q: How do I plan on paying my taxes quarterly? How can I figure it out so that I am not slammed in April? -- Regina, West Roxbury

A:There is a "safe harbor," rather than trying to calculate what your income is and applying the next year's tax rates and deductions to that income.

If your Adjusted Gross Income (the amount at the bottom of page 1 of your Form 1040, just before you carry that amount onto the second page) is less than $150,000, then provided that you pay into the Treasury through either withholdings or Quarterly Estimated payments the amount of the tax you owed (before offsetting payments) on your prior year's return, you will owe no penalties (although, if you have a very good year, you may owe a substantial balance with your return). If your income exceeds $150,000, you must pay in 110% of the prior year's tax in order to avoid penalties.

If you want to avoid owing a large balance, the only way we know of is to prepare a "dummy" return on the prior year forms, estimating, as best you may, your income and deductions for the year and then applying the current year's tax rates to that income. Then see if your withholdings and payments will cover that tax liability.