[quote]I just received a rather large check for some work I did many years ago. Taxes were not taken out of the check, and it's roughly equivalent to a year's salary (my annual salary sucks - the check is in the low-mid five-figure range).
Do I need to pay estimated taxes on it now or can I wait until April 15th? And if I pay now, how do I figure the amount of the tax? How do I pay? (do not want to do it online.) And how close do I have to get? Under these circumstances, is there a penalty for underpayment?
Not really enough info for a complete answer. You say that "taxes" were taken out. Were you paid as an employee? Was Social Security and Medicare (or FICA) withheld? Or is there just federal income tax taken out?
If you are an employee, you'll owe only income tax, minus the federal income tax withheld.
If you are being paid as an independent contractor, you likely will owe regular income tax PLUS the extra 13.3% self-employment tax, less whatever tax was withheld.
In either case, if the amount you owe on your return at year end exceeds the GREATER of $1,000 or 10% of your total tax liability for the year, there could be a penalty for not having enough withheld through the year. One exception: If the amount you had withheld equaled your previous year taxes in full (or 110% of them, if your AGI is over $150K).
If you think you'll be in a penalty situation, you can make an estimated tax payment with the 2012 Form 1040ES. Suggest doing so as soon as possible, since any penalty will continue to run until the date they receive your check.
However, since this was a one-time thing with the extra money, likely you can write a letter and get the penalty for underpayment of your estimated taxes waived, just this one time. Wait until they assess the penalty, then explain the situation. Bottom line: "I didn't realize I had to make payments, it was just one time, should not happen again." 90%+ chance they'll buy it.