Question

I was under withheld and paid a penalty for 2020. I have increased my withholding so that I will not be under withheld in 2021. Do I still need to pay quarterly in 2021?

Forum|Forum|5 years ago
March 14, 2021
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TurboTax Deluxe Online

Yes, you may pay estimated payments if you expect to owe tax of $1,000 or more to avoid penalty.Taxes are paid as you earn or receive income during the year, either through withholding or estimated tax payments. Estimated tax is used to pay not only income tax, but other taxes such as self-employment tax and alternative minimum tax.

For estimated tax purposes, the year is divided into four payment periods. You may send estimated tax payments with Form 1040-ES by mail, or you can pay online, Visit IRS.gov/payments to view all the options.