The IRS has a new webpage of information for your high-net-worth clients who pay estimated taxes quarterly because of consulting engagements or other contract work, or who have commission- and bonus-based income from which taxes are not withheld.

An increasing number of taxpayers have recently incurred penalties for underpaying estimated federal income tax throughout the year. The number of people who paid this penalty jumped from 7.2 million in 2010 to 10 million in 2015, according to the IRS. That's an increase of nearly 40 percent.

“The penalty amount varies,” the IRS warns, “but can be several hundred dollars.” This holds especially true for HNW clients.

According to the IRS, your client will have to pay estimated quarterly taxes if he or she expects to owe at least $1,000 in tax for the current tax year after subtracting withholding and refundable credits and your client expects withholding and refundable credits to be less than the smaller of: 90 percent of the tax to be shown on your client's current year’s tax return; or 100 percent of the tax shown on your client's prior year’s tax return. (Your client's prior-year return must cover all 12 months.)

As the end of 2017 approaches, your clients who suspect they underpaid quarterly taxes this year can overpay the final payment on Jan. 16. Tax reform's effect on quarterly payments is still hard to call, but any changes will apply to Q1 '18 quarterly taxes, due on April 17, 2018. The other quarterly due dates are in June and September.

You can use two methods to calculate your clients’ quarterly taxes, says Karen Artasanchez, CPA with Wilkin & Guttenplan in East Brunswick, N.J., who notes that individuals won’t be penalized for underpaying their estimated tax as long as they make payments throughout the year that equal 110 percent of their prior-year tax.

“This method may still result in taxpayers owing money when they file their return because their estimated payments were designed to avoid penalties, not pay in the full amount of tax due,” she says, adding that clients won’t be penalized for underpaying as long as their annual payments total at least 90% of their estimated current-year tax.

The biggest mistake quarterly taxpayers make is neglecting to pay or underpay their taxes, says Michael Eisenberg, CPA with Squar Milner in Encino, Calif. “A couple of things can, and do, go wrong with this plan,” he notes.

First, Eisenberg says, your clients will pay more than just the tax due—they also incur penalties and interest. “The thinking might be that they’re earning interest on their funds by not giving it to the government on a timely basis,” he adds. “But in today’s environment, the amount of interest paid is very small. The penalties and interest they’re required to pay will offset interest earned. Another mistake is not computing the correct amount of taxable income.”

Among the potential trip-ups for your clients in this regard: not taking into account that some part of Social Security benefits could be subject to federal income taxes; having large capital gains on an asset sale they didn’t have in the prior year; or much smaller tax deductions than in the prior year.

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