Safe Harbor Information

My client's income is unpredictable. How can I calculate Safe Harbor?

• Safe Harbor tax laws help taxpayers avoid underpayment penalties if they owe less than $1,000, or by paying a certain amount based on the current or prior year's taxes due. 
  
  
• If the client's income is unpredictable, you can either pay 90% of what you think their tax in the current tax year is going to be or pay 100% (or 110% if AGI is over a certain amount) of the prior year's taxes due.
• On the Tax Report, the safe harbor number shown in the Key Figures section of the tax report represents the 100% (or 110%) variation of that calculation. The question mark next to the number shown circled below provides more detail (seen in the second screenshot below) on where that number comes from.

• In Scenario Analysis, the safe harbor line represents the 90% variation of that safe harbor calculation. Since scenarios are independent of each other and referring back to the prior year is not possible, 90% of the projected taxes due for that current tax year is used.