Question

Estimated Tax payments 2023 seems incorrect

Forum|Forum|2 years ago
August 21, 2023
1 reply
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Hi all;

After I enter all my estimated income for 2023, and select the method "100% of your estimated taxes for 2023 ($xxx)", it says that I don't have any estimated tax liability for 2023. But my withholding was only 84% of what turbotax calculated for my liability. Isn't that wrong - I need to either withhold 90% of my tax liability or 100% (or 110%) of 2022 taxes. 2022 taxes were more than double 2023, so It seems like neither 90% of 2023 taxes or 100% of 2022 met. Is there a turbotax error?

Thanks in advance!

Cheers

Beachfan

TurboTax Home & Biz Windows

M

Mike9241

since you didn't gve us numbers there is this third rule for avoiding penalties

3) the balance due after subtracting taxes withheld from 90% of your 2023 tax is less than $1,000

so if 90% of 2023 taxes less your withholding is less than $1000 no estimated are required.

for example: if 100% of 2023 taxes is $16600 then 90% is $14940. 84% of $16600 is $13944 which would leave an estimated tax balance of only $996. since this is under $1000 there would be no penalty if not paid (provided your estimations are correct)

you can do something about this if you want. on the "est tax options worksheet" there are several options in the section preparing estimated tax vouchers one of these is to prepare them even if the amount of estimated taxes due is less than $1000 - so estimates would be prepared in the above scenario for $996. you can choose to round to multiples of $10 ( total estimate $1000) or round to multiples of $100 ( total estimate $1200)

if you want to play it even safer lower the withholding you estimated.