Jen asked:


I am new to filing as an independant contractor. I read I will need to file quarterly but also saw this on a site:

Who Must Pay Estimated Tax

If you had a tax liability for 2005, you may have to pay estimated tax for 2006.

General Rule
You must pay estimated tax for 2006 if both of the following apply.

You expect to owe at least $1000 in tax for 2006 after subtracting your withholding and credits.
You expect your withholding and credits to be less than the smaller of;
90% of the tax to be shown on your 2006 tax return, or
100% of the tax shown on your 2005 tax return. Your 2005 tax return must cover all 12 months.

Now does this mean that if I am able to qualify for the eic that I will not have to pay quarterly because I would be owing less than $1000 in taxes? Sorry if this is a dumb question, just so lost on how to file as an independent contractor. Hope all this makes some sort of sense.
How do I know how much to withhold from each check to pay up quarterly? I heard it is very difficult to estimate and i will get a penalty for accidentally underpaying.

GorillaMyke asked:


4 siblings inherited a house (trust). Now one sibling is buying the rest out with a loan. Do the siblings that are receiving a lump payment for their portion of the house have to pay taxes on this amount? What type of taxes? What can they do to prevent from having to pay that many taxes (reinvest within 30 days). Only serious answers please. Thanks in advance.

P.S. I don’t think capitol gains is an issue, because the mother just died, and there was no increase in value of the house since she died, and now.