Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.
Q: If all of your income is generated in the last month of the year and you file estimated taxes, must you file quarterly returns in equal amounts or can you file nothing or lesser amounts in the first three quarters and settle up in January?
A: You do not have to file equal amounts quarterly; the amount that you send in depends on the income earned each quarter. You can use the Annualized Estimated Tax Worksheet (see IRS Publication 505) to determine the amount you should send in each quarter. Remember, if you do not send in enough during the first three quarters and too much the last quarter, you may still face a penalty even though you may be due an overall refund. This is because the excess deposited does not apply to past, but to future quarters.
Q: Is a dependent child, age 16, who has phased out on the parent's return due to the parents' income level, entitled to the $2,450 exemption on the child's own return?
A: No. When parents are able to claim a child as an exemption, then lose that exemption when their income exceeds certain levels, the child cannot then claim the exemption.
The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.