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Level 2

Question

estimated tax payment vs. balance payment

Forum|Forum|3 years ago
January 26, 2023
1 reply
5 views

I had an investment income in the 4th quarter, so I tried to make an estimated tax payment on due date (Jan. 17th, 2023) for 2022 tax.

However, I made a payment for the balance payment option instead of the estimated tax payment option.

Will it be alright for me to use this balance payment as the estimated payment?

I am worried about being subject to tax penalty for underpayment due to this issue.

Level 15

Without knowing what your tax obligation is for the year, it is difficult to determine if your estimated payment will be sufficient. What you can do is look at your tax from the previous year and divide it by 4. If you pay in that amount on a quarterly basis then you will have paid in sufficient estimated tax to avoid a penalty for late payment of tax, provided you pay any tax due by April 18, 2023.

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Level 2

I paid enough taxes for 2022, but my payment was not categorized as estimated tax payment.

I accidentally chose balance payment instead of estimated tax payment.

Could the balance payment on due date be considered as the estimated tax payment?

Level 15

you paid some or all of the "amount you owe".

such payments don't appear on your tax return.

if you scheduled the payment for April 18th just keep that in mind when finally paying the "amount you owe".