I owe around $1300 to IRS this year. Am I forced to due estimated taxes or can I just pay it in full next year?

Forum|Forum|1 year ago
February 21, 2025
3 replies
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My main question is if I am forced to pay estimated taxes.

Vanessa A

If you will owe taxes next year and you do not make estimated payments this year, then you will have penalties attached to the amount you owe. So it is best to make quarterly payments to avoid any underpayment penalties.

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Opus 17

Employee

I'm not quite clear on your question.

First, if you owe $1300 this year, you must pay it by April 15 or you will be assessed penalties.

Second, if your income, tax payments and withholding are expected to be similar in 2025, so that you would owe again, you should plan to either increase your withholding or make extra estimated payments. You can be assessed a penalty for under-payment if you do not have enough withholding during the year, even if you pay in full when you file your return. Turbotax may give you suggested estimated payments, you do not have to follow the estimates if you have a better way to calculate what you owe, but you may need to pay something to avoid penalties next year. Here is the IRS payment and withholding estimator site.

https://www.irs.gov/individuals/tax-withholding-estimator

Mike9241

current IRS rules for avoiding underpayment penalty in 2025. state laws vary

There will be no federal penalties for not prepaying enough taxes during the year if withholding and
a) timely estimated tax payments equal or exceed 90% of your 2025 tax or
b) timely estimated tax payments equal or exceed 100% of your 2024 tax (110% if your 2024 adjusted gross income was more than $150K) or
c) the balance due after subtracting taxes withheld from 90% of your 2025 tax is less than $1,000 or
d) your total taxes are less than $1,000

MK151

Can the estimated tax payment be in unequal amounts, meaning that if I estimate I won't owe that much taxes much towards the end of the year, I can reduce the last one or two payments?

TomK2023

Yes, with a caveat. Just be aware that If you forgo paying the full amount of your estimated tax payments, you could incur an underpayment penalty.

"The safest option to avoid an underpayment penalty is to aim for "100 percent of your previous year's taxes." If your previous year's adjusted gross income was more than $150,000 (or $75,000 for those who are married and filing separate returns last year), you will have to pay in 110 percent of your previous year's taxes to satisfy the "safe-harbor" requirement. If you satisfy this test, you won't have to pay an estimated tax penalty, no matter how much tax you owe with your tax return.

If you expect your income this year to be less than last year and you don't want to pay more taxes than you think you will owe at year end, you can choose to pay 90 percent of your current year tax bill. If the total of your estimated payments and withholding add up to less than 90 percent of what you owe, you may face an underpayment penalty. So you may want to avoid cutting your payments too close to the 90 percent mark to give yourself a safety net."

For more information, see TurboTax article: Estimated Taxes: How to Determine What to Pay and When

The installment payments are typically due on April 15, June 15, and September 15 of the current year and then January 15 of the following year. You can skip the final payment if you will file your return and pay all the tax due by February 1. If a due date falls on a weekend or legal holiday, the deadline is pushed to the next business day.

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