Withholding taxes on distribution
If a client takes a distribution on January 10, 2011, are they allowed to count it towards their 2010 estimated taxes or as part of their tax liability for 2010?
Many thanks,
Lenny
If a client takes a distribution on January 10, 2011, are they allowed to count it towards their 2010 estimated taxes or as part of their tax liability for 2010?
Many thanks,
Lenny
Permalink Submitted by Alan Spross on Mon, 2011-01-10 18:52
No, withholding from a distribution made in 2011 must be assigned to 2011 withholding. Client could have requested the full gross distribution, and then used part of it to fund an additional 4th Q estimated tax payment for 2010, due by 1/18/2011. Or if client could not make that deadline either, could file tax return by 1/31/2011 and pay entire balance in lieu of the 4th Q estimate. Filing by 1/31 is becoming increasingly difficult for various complexity related reasons.