Required to pay quarterly estimated taxes?

[woody777]

Hi there! Trying to find out if we are **required** to pay quarterly estimated taxes after a year where I went back to work and my spouse had a larger-than-usual bonus. We also claimed too little on our W4s, overall causing us to underpay in 2022. We've adjusted our withholdings to have more taken out and my spouse's bonus will be less than a quarter of last year's amount. We were given vouchers with our TurboTax return to pay quarterly; do we have to pay the quarterly amount or risk a penalty? Thanks.

[PattiF]

No, you do not have to pay the quarterly estimated payments. If you feel comfortable with the adjustments that you made to your withholdings and aren't expecting to owe at the end of 2023, you don't need to pay estimated payments.

[VolvoGirl]

The 1040ES are estimates for next year. The 1040ES quarterly estimated tax payments DO NOT get sent to the IRS or state with your return. So they won't be expecting them.  They are optional to pay. Turbo Tax is very conservative and doesn't want you to owe too much next year. They might have printed out if you got a one time large income this year. Like if you took a IRA or 401K distribution. You can ignore them. You might want to adjust your withholding at work so you won't owe too much next year.

[woody777]

Thank you!!

[Mike9241]

estimates are not required.  one safe harbor to avoid penalties for 2023 is for withholding (both of you combined) to equal 100% of your 2022 tax or 110% if line 11 of your 2022 1040 was  over $150,000

[Opus 17]

I want to put a different spin on this.  Incomes taxes are pay as you go, and periodic payments are required, either by payroll withholding, estimated payments, or both.   However, there are several safe harbors where you won't be penalized for not making payments.  In other words, periodic payments are always required by the regulations, but you won't be penalized for failing to make payments if you meet certain tests.

It sounds like you owed a large tax bill in 2022, and turbotax is printing estimated vouchers for 2023.  They are only a suggestion, and you don't have to follow the vouchers if, as you say, you have already adjusted your withholding.  As long as your withholding more or less covers what you owe, that's all that is required.