Amended return results in less Overpayment to be applied to next year's Estimated Taxes, yet TurboTax says I owe $ to IRS

[ThomasM125]

For practical purposes, if you file the amended return and don't make a payment even though one is due, the IRS will adjust the amount of estimated tax credited to next year's filing when you file that return, so it will all even out eventually. The only problem with that is you may be subject to penalties for late payment of tax.

@jomshopper 

[jomshopper]

And so is it correct that if I pay the extra tax, (to avoid penalties) then the amount applied to estimated tax for next year would be equal to the original higher overpayment on my 1040 before I corrected the return?  (equal to the old overpayment minus the extra tax , but then  plus the amount of extra tax)?  In other words, having missed some income, the IRS is now requiring me to pay the difference in cash to maintain the original overpayment that I had applied to estimated taxes before correcting the return,  just because I opted to apply my entire original refund to 2023 estimated tax rather than take a refund? Whereas if I had asked for a refund originally, paying the tax would just offset the amount of the refund I shouldn't have gotten in the first place. If this is all true it is a very convoluted system.  

[RobertB4444]

All of that is true except that if you had requested a refund in the first place and then received it prior to filing the amended return then you would have to be sending in the taxes with the amendment as well.

@jomshopper 

[jomshopper]

Right but I AM being instructed to send a tax payment with the amendment even though I did not ask for the overpayment as a refund. So what I am still not entirely clear about, is that if I send the additional tax payment with the amendment, will my overpayment and amount applied to 2023 estimated taxes remain the same as it was BEFORE I amended the return? The revised TurboTax 1040 does not show that - it shows a reduced amount of estimated tax applied to 2023, even though it is also instructing me to SEND the additional tax that the missed income required with the amendment. What is confusing is that it seems that it is both requiring the extra payment for this year, while also REDUCING the amount applied as estimated tax applied to next year by the same amount. Hopefully the IRS would recognize that if I send the extra tax, than my overpayment would not change.

[DianeW777]

Yes, as a rule the IRS leaves the amount of your refund you initially requested to be applied to the 2023 return from the original return. They do not usually get reconciled together that quickly and I have seen cases where they did not adjust the amount requested to be applied to your next year estimates. You can wait to send the additional tax to see how it gets reconciled if you choose.  I understand your confusion as well.

@jomshopper