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Just curious - in the US - say it's the first time you are filing taxes.

(I suppose the only two possibilities are either (A) you happened to move from overseas or (B) imagine a highly successful teen idol type who suddenly made a lot of money and previously was just a kid and/or made zero money.)

So in 2017 you made $500,000.

It is 100% 1099 income.

But you have never, ever dealt with the IRS before and it's your first filing.

For concreteness say you were paid evenly spaced throughout the year.

In fact - - do you pay the small penalty for not having paid estimated taxes as you go along?

Or are you sort of "exempt" your first go around?

Fattie
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2 Answers2

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No. From 1040-ES:

Exception. You do not have to pay estimated tax for 2017 if you were a U.S. citizen or resident alien for all of 2016 and you had no tax liability for the full 12-month 2016 tax year. You had no tax liability for 2016 if your total tax was zero or you did not have to file an income tax return.

Magua
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In fact - - do you pay the small penalty for not having paid estimated taxes as you go along?

No, an exception to the penalty for underpayment of estimated taxes is made when no tax liability existed in the prior year. Instructions for Form 2210 indicate:

Exceptions to the Penalty
You won't have to pay the penalty or file this form if either of the following applies.

  • You had no tax liability for 2016, you were a U.S. citizen or resident alien for the entire year (or an estate of a domestic decedent or a domestic trust), and your 2016 tax return was (or would have been had you been required to file) for a full 12 months.

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Community
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Hart CO
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