Scenario: A husband & wife were filing jointly with quite high income due to husband's annuities. They always used the 110% calculation for estimated taxes. Husband died in Oct '23 and annuities ended with his death. Wife's '24 taxable income will be substantially lower, perhaps having close to zero tax. Does she need to calculate her '24 estimated taxes based on their '23 tax or can she estimate based on her expected very low '24 income? Want to be sure there won't be a penalty for not paying at least 90% of the 2023 tax.
You won't have any penalty if you pay estimated taxes equal to 90% of the current year's tax or 100% of the previous year's tax (110% for higher income earners), whichever is less.
In your case, you can calculate estimated taxes based on 90% of your expected 2024 income.
You won't have any penalty if you pay estimated taxes equal to 90% of the current year's tax or 100% of the previous year's tax (110% for higher income earners), whichever is less.
In your case, you can calculate estimated taxes based on 90% of your expected 2024 income.