Estimated CA + Fed quarterly estimated tax calculation incorrect

Forum|Forum|1 year ago
March 14, 2025
1 reply
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I used TT for 2023 and had it calculate my estimated quarterly taxes for Fed and CA based on 100% for the 2024 tax year. My income was almost the same in 2024 as in 2023, yet I owe $3600 in CA and have a $135 penalty. I will receive a $4600 Fed refund.

My income for both years included a nearly identical Roth conversion at the end of the year. I had regular Fed and CA taxes withdrawn from my pension with maximum withholding. Since my taxes were nearly identical 2023 to 2024, I trusted the estimated tax payment calculations that TT made. I made the estimated tax payments on time.

I'm not sure why TT so grossly underestimated my quarterly payments for my CA and why I have such a large Fed refund. Doesn't TT guarantee that their calcs are accurate? How do I access that guarentee if a calc isn't correct?

VolvoGirl

Employee

They were just estimates and optional to pay. I always go into the program to update my income to adjust the estimates each quarter. I don’t trust the automatic estimates Turbo Tax provides. I have the Desktop program and also use the What-If worksheet.

Did you enter the payments into your tax return?

ADB4Author

Yes, I entered all the estimated plus withheld amounts into our desktop Premier 2024 version. We also use the 2023 what-if worksheet and I actually decreased the Roth conversion for 2024 compared to 2023 so that the totals would be similar. Dividends were a little higher in 2024 necessitating a reduction in the Roth conversion to make income approx equal, in each category, as the previous year (2023). We used the what-if worksheet for this. My mistake is that I should not have trusted that TT will calculate estimated taxes correctly, even when the tax situation is nearly identical. From now on, I certainly will use 110% and add significantly extra to each CA estimated payment. I'd rather have a refund to apply to next year's than a penalty.

I guess I feel like some of my trust is reduced in TT.

kmd11

Employee

I had the same thing happen!! My CA 540-ES quarterly estimates from TurboTax for 2024 were grossly under for California such that I ended up with a $110 penalty. I'm going to ask CA for a waiver. But this is super annoying and clearly a bug in TurboTax. I am using TurboTax Premier 2024.