how to stop estimated taxes and fix previous penalties

Forum|Forum|26 days ago
May 13, 2026
2 replies
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Ask the Experts - W4 - May 2026

VolvoGirl

Level 15

Please explain more. What estimates? Estimates for next year 2026? Those are optional to pay. What penalties for what years?

riverarrAuthor

Level 2

Hello. Its a mess. I worked as an independent contractor in 2014, thus had to pay estimated tax. I was hired as a full time employee later in 2014. I filed my 2014 return with estimated tax. When I filed for 2015, it didn't update and I didn't realize I was still marked for paying estimated tax despite paying the regular method for each paycheck. It has continued since then and I didn't catch it until 2023. I changed it then, but it keeps coming back. I was told I would have to refile all the way back to 2015 to stop it. I changed it again this year for 2025, and it was not showing on my return and filed, but now I just received a letter from the IRS that I miscalculated my return and I owe a penalty for estimated tax. Same for state, my return was accepted with a refund, but now my state tax board is telling me I owe a balance. Please help reverse this estimated tax process.

mbpeddie

Employee Tax Expert

To clarify your situation, you made estimated tax payments while a self employed individual and then became an employee where you had tax withheld from your pay checks.

If your federal income tax withholding (plus any timely estimated taxes you paid) amounts to at least 90 percent of the total tax that you will owe for this tax year, or at least 100 percent of the total tax on your previous year's return, you most likely will not need to make estimated tax payments.
If you are not withholding enough from your pay to meet the above requirements, you may see estimated tax vouchers printing suggesting you need to pay more tax throughout the year.

However as an employee, you do not need to make estimated tax payments and should ensure you are having enough withheld from your pay. You can use the TurboTax W-4 calculator to calculate how much you should have withheld and give a new W4 form to your employer.

https://turbotax.intuit.com/tax-tools/calculators/w4/

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