Estimated Taxes

[chicagodon]

My 2022 taxes were only a little lower than my 2021. How come Turbotax didn't provide me any information about estimated taxes for 2023?

[RicardoMontejo]

I had the same issue. I was expecting to have to pay estimated taxes but TurboTax did not conclude that. I filled out the estimated tax worksheet provided by the IRS and it calculated that indeed I do need to pay estimated taxes.

TurboTax said that I needed to pay State estimated taxes this coming year just like I did last year. So I am trying to figure out what is going on also. 

[MonikaK1]

There are a number of tools both inside and outside of TurboTax that you can use to calculate your estimated taxes for 2023.

When you prepare your 2022 return, TurboTax will automatically calculate your 2023 estimated tax payments and prepare 1040-ES vouchers if it determines that you may be at risk for an underpayment penalty next year.

Your federal income tax withholding (plus any timely estimated payments you plan to make) should amount to at least 90 percent of the total tax that you will owe for tax year 2023, or at least 100 percent of the total tax on your 2022 return (110 percent for AGIs greater than $75,000 for single and separate filers and $150,000 for married filing joint) to avoid a penalty.

The 2023 tax year—and the return you'll file in 2024—will have the same seven federal income tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%.

You can also calculate your 2023 estimated taxes and generate the payment vouchers by following the steps below. If you already filed your 2022 return, you will need to wait until your filed return is processed (payment acknowledged / refund received) before reentering your return. See here for the process to open/amend a return that has been filed.

To calculate estimated taxes and prepare Forms 1040-ES:

1. With your tax return open, search for 1040-es (be sure to include the dash) and select the Jump to link
2. Answer No to the question Do you want to change your W-4 withholdings for 2023? (unless you expect to make all of your payments through withholding)
3. Answer the questions about things like your 2023 filing status, income, and deductions
4. Eventually, you'll come to the Print Vouchers? screen. Answer Yes and TurboTax will include your 2023 1040-ES payment vouchers when you print a copy of your return later

In addition, TurboTax's TaxCaster is available without opening your return and will estimate your total taxes for 2023.

You can also use the IRS Withholding Estimator to calculate amounts to be withheld from wages.

Have this ready:

• Paystubs for all jobs (spouse too)
• Other income info (side jobs, self-employment, investments, etc.)
• Most recent tax return

@chicagodon 

@RicardoMontejo  

[RicardoMontejo]

When you prepare your 2022 return, TurboTax will automatically calculate your 2023 estimated tax payments and prepare 1040-ES vouchers if it determines that you may be at risk for an underpayment penalty next year."

TurboTax did not conclude that I needed to pay estimated taxes for 2023. I was leery why it didn't so I filled out the estimated tax worksheet provided by the IRS and with the numbers I entered it says that I will need to pay estimated taxes. Have not tried going back into TurboTax and follow the steps provided by the forum experts yet to see what happens there.

I dunno. 

[TeresaM]

TurboTax has a tool called TaxCaster to give you an idea of your tax liability and/or refund. You can vary different items and see how that could impact your return. You can try it as married filing separately, if you got a bonus, or sold investments.  This will give you an idea if you should make estimated payments or change your withholding for your W-2.  Click for TaxCaster.  If things change during the year, you can try it again and always make an estimated payment then. 

This could be helpful if you wish to check your Form W-4 withholding. You can file a new one at any time with your employer and TurboTax has a tool to help calculate the best withholding. Click for TurboTax Withholding Calculator.

Click for the IRS Payment page where they can take payments for estimated payments (or amounts due on returns). Please be sure to specify which type of payment.