June 1999

What's New in Taxes

New rules for 1999 tax estimates

6/1/1999 -

If you're required to make quarterly estimated tax payments, the second installment for 1999 is due June 15.

For higher-income taxpayers, this year's payment of estimated taxes comes under new rules. If your adjusted gross income exceeds $150,000 annually, you can no longer use 100 percent of your prior-year tax liability as a safe-harbor computation for your 1999 quarterly estimates. Instead, you must use 105 percent of your 1998 tax liability to compute your 1999 estimates.

For the next two years, that percentage will change to 106 percent, and in the third year to 112 percent. Four years from now, it will drop again to 110 percent, the figure that applied to the estimated tax payments of higher-income individuals prior to the 1997 Taxpayer Relief Act.