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Should I increase my final estimated tax payment?

Forum|Forum|3 years ago
January 8, 2023
3 replies
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TurboTax calculated my 2022 estimated tax payments based on 100% of my 2021 tax paid. I made the first 3 quarterly payments per plan. In June I decided to go ahead with starting my social security payments. It took a while to get it sorted, but in Oct I received the payments for July-Sept and subsequent payments. As a result, my 2022 total income is quite a bit higher than 2021.

The 4th quarterly estimated tax payment is due on Jan 17. Should I adjust the payment to more accurately reflect the increased income?

Thanks.

Best answer by Anonymous_

Yes, most likely you should.

See https://www.irs.gov/pub/irs-utl/reentry_council_mythbuster_federal_taxes.pdf

A

Anonymous_Answer

Employee

Yes, most likely you should.

See https://www.irs.gov/pub/irs-utl/reentry_council_mythbuster_federal_taxes.pdf

D

dconAuthor

I am 100% sure that you replied to the wrong message.

VolvoGirl

Employee

It depends how much other income you have. Only part of SS can be taxable.

Up to 85% of Social Security becomes taxable when ALL your other income plus 1/2 your social security reaches:

Married Filing Jointly: $32,000

Single or head of household: $25,000

Married Filing Separately: 0

If you do not pay in enough tax from withholding and estimates, you may have to pay a penalty for underpayment of estimated tax. Even if you are getting a refund you can still owe a penalty for not paying in evenly during the year. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. It is included in your tax due or reduces your refund.