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Since my NSF fellowship is not taxed, I’m supposed to pay taxes on it in quarterly installments.  I can either make an estimated tax payment for the past quarter by January 16, 2007, or file my 2006 tax return by January 31, 2007.  If I do neither, and wait until April to file my taxes, I get charged a big fat penalty by the IRS for underpaying my taxes. So long as I get all my necessary tax information, I’d rather just file my tax return by the end of the month and be done with it.

I received my W-2 from Kelly Services yesterday, so I was able to fill out most of my 1040. I just need a couple 1099-INTs from institutions that I can’t download online (like Bashas’ FCU and SECU). But considering my taxable interest is very minimal (and probably isn’t much different than years past), I was able to get a fairly accurate representation of my taxes. At this point, it looks like I owe $800 in federal income tax. That’s a lot less than I thought I would owe. I figured this is largely due to my overpaying taxes while working at Intel — and any refund from that is just balancing out what I owe on my NSF stipend. Also, the Raleigh moving expenses deduction helped out (though I would have rather not dealt with that entire fiasco). And of course there’s the $30 federal excise tax refund credit that everyone gets. I’m just glad my taxes are still easy enough that it only takes me an hour or two and I don’t have to pay for any software. I would gladly own a house and spend the extra time itemizing my taxes, but what can you do?

For the upcoming year, I can either pay all of my estimated tax by April 16, 2007 (ha, fat chance), or make quarterly payments according to the following schedule:

1st payment April 16, 2007
2nd payment June 15, 2007
3rd payment Sept. 17, 2007
4th payment Jan. 15, 2008

Otherwise I get charged a penalty by the IRS come tax time. While I was “in the mode,” I went ahead and figured out my estimated payments for 2007 based on my 2006 taxes so far using 1040-ES. I came up with a total of $2516 or roughly $210 a month. It’s nice to know exactly how much money I have to sock away, rather than having this fuzzy lump sum that seems right, but still is just a guess.

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