estimated taxes...

[FuckRx]

I have to send in estimated payments to federal and state every 3 months or so, i'm sure others are familiar with that too. i think i send it april/june/september and january.
i keep the money in a separate savings account until it's time to send it...
i send in about 25k every payment period for a total of about 100k...
would it be wiser to invest that money for the year and then send it in all in at the last minute? i figure there is a penalty if i don't send in each partial payment so would it be worth it?

[dragoncar]

Right now I think penalty is 3% annual (so not the full 3% on, say, the third estimated payment).  I think many would advocate investing that (eg people who say to keep a low interest mortgage if you invest the difference).  Of course the problem is you still need to pay the IRS if the market tanks, so you might be forced to sell a loser.

[chasesfish]

If you don't make those payments, there is an under withholding penalty.  Last time I hit that penalty, it was 7%

[Jamesqf]

Maybe it's just my paranoia, but I think it's likely that not sending in the estimated tax payments on schedule will raise flags at the IRS office, and put you on the audit list.  Which, even if your tax returns are scrupulously accurate, is a major hassle.

[willn]

Invest in what? My risk meter is pinging like a sonar.  You have seen an S&P 500 chart for a year and watched what can happen to 100K, right?