wtownsfma
Level 2

Quarterly estimated payments

I made  an estimated payment to IRS and it was returned. Will I have to pay a penalty later? 

conniem123
Employee Tax Expert

Get your taxes done using TurboTax

Making estimated payments are a great way to not owe so much when filing your taxes and to avoid the underpayment penalties.

There are two ways to avoid the underpayment penalty;

You can avoid the penalty if your total timely estimated payments and withholdings are greater than or equal to the lesser of:

  • 90% of the total tax after credits for the current year, or
  • 100% of the total tax after credits in the prior year

Of course it's hard to estimate 90% of the current year tax, so best to go with second option.

https://turbotax.intuit.com/tax-tips/irs-tax-forms/what-is-form-2210/L2z0haVWb

 

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