Estimated tax penalty

Forum|Forum|1 year ago
October 10, 2024
2 replies
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What i understand is if I pay in with my W-2 withholding plus estimated tax at least 90% of current year tax liability, I will not have a penalty.

Also, if I pay in 100% of last years tax liability, I should be okay? My penalty is calculating based on 110%of last years. is that based on my agi?

Not A Product Question

Best answer by Bsch4477

Taxpayers with incomes over $150,000 must ensure their withholding and estimated tax payments cover at least 90% of their current tax year liability or 110% of their prior-year tax liability to potentially avoid underpayment penalties

Bsch4477Answer

Employee

fanfare

Employee

What is your 2023 tax ? do you have withholding taken in 2024?
If your total 2024 withholding alone is 100 % of that amount ( 110% if your 2023 AGI is over $150,000),

you don't need to make estimated tax payments. This is the prior year's tax rule.

@pbarber

Mike9241

NOTE when Turbotax computes you need to pay estimates it assumes your withholding will not change from the current year.