The AMT bracket for 2007 is lower than 2006 as a result lot of taxpayers may have to pay more taxes for 2007 for the same income in 2006. Congress may make a decision later in the year to adjust the rate but it will be too late to make any adjustment to withholdings. My question is, if my withholdings are similar to 2006 and the AMT adjustment does not happen which would mean I need to pay more taxes this year, then can I wait till the end of the year and then just make one Estimated Tax payment on January 15, 2008 to make up the difference. I only have salary income so usually do not make any estimated tax payments.

Yes, you can pay the balance of the taxes on January 15th 2008, or you could pay the balance of your tax liability on April 15, 2008. The important thing to remember is that you should try and avoid the underpayment penalties and interest.

Always try and pay at least 110% of prior years tax liability to avoid the underpayment penalty and interest. You may accomplish this by increasing your withholding or paying estimated tax payments during the year!

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