Q. In 2005, I had to pay estimated taxes on a quarterly basis because I had a large gain from the sale of a property. This year, my tax service recommended I pay the IRS $2,400 every three months. But my income has been lower than last year. I'm wondering if I should be ignoring that advice.

A. You should be talking with your tax adviser because estimated taxes can be a convoluted topic.

But here's some background applying to your problem.

Estimated taxes are collected on income that's not subject to withholding. Many people don't have to worry about this because their employer collects the taxes for them. But other people may not have taxes withheld for their self-employment or sale of a property.

If you really want to dig into this, you can go to www.irs .gov and look up IRS Publication 505. It's written in language that only a tax accountant could love, so you may have to read the explanation of estimated taxes several times before it starts making sense.

But if you do manage to get through it, you'll see where there are various ways to figure out what you owe. Be aware that you can be penalized for not paying it, even if you think you're going to get refund at the end of the year.

"Unfortunately, estimated taxes are pretty complicated," said David Ramirez, who owns a franchise for the Jackson Hewitt Tax Service.

In general, taxpayers who owe estimated tax are on a pay-as-you-go system with people having to pay it four times a year on what they've earned, Ramirez said.

You should ante up if you expect that you'll owe more than $1,000 in taxes after withholding and credits are subtracted.

You won't be subject to penalties and interest if what you owe at the end of the year is less than $1,000.

One way to judge how much to pay is to at least duplicate what you paid last year if you expect your income is about the same.

You also can go through and figure out your tax rate for this year using what income and credits you expect to have. You can then apply the tax rate to what income you've earned during the quarter to get the estimated amount.

"It's not the easiest thing to do," Ramirez said. "It's a bunch of calculations to try and determine this."

He said the Internal Revenue Service sometimes will waive penalties for folks who didn't know they were supposed to pay the estimated tax, such as those who are newly self-employed or had a gain on a sale of a property.

Ramirez said in those cases the taxpayer might write the IRS and describe the circumstances and see if the IRS will waive the charges.

Got a question?

Do you have a question about personal finance, taxes or other money matters? Reach Akamai Money columnist Greg Wiles at 525-8088 or gwiles@honoluluadvertiser.com