Last year my self-employment income was $300k and I paid about $80k in federal taxes.
This year, in the first quarter, all of my business dried up and I had $0 in income. Turbo tax was advising me to make an estimated tax payment of $20K on Apr 15th, but I had no income from which to pay this amount.
In May I got a huge contract, and business surged, so I will now make a $40K payment by Jun 15th. But as I understand the rules, I will owe a penalty and interest to the IRS as a result.
Question: I understand that the IRS wants their cut of your income on a quarterly basis, but how can I pay them a cut of income I didn't make? And am I correct that I have now broken the rules and will incur penalties?