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Get your taxes done using TurboTax
Can someone please verify that what I wrote in my last post is correct?
ALSO, I have a question regarding the calculation of estimated payments for May, August, and December.
You state that I should do the same calculation that I did for March, which is:
X= 110% of 2022 tax divided by 4
subtract A which is tax withheld to date
P= payment
X-A=P
Do this on 3/31, 5/31, 8/31 & 12/31
This method works fine for 3/31. However, in 5/31 (and later), if I use A as the tax withheld to date, A will be all tax withheld from 1/1 - 5/31, which will be a much greater number than the first quarter, and I will be subtracting it from X, which is just 1/4 of the total tax. This cannot be correct...
Should I recalculate A each quarter like the following:
5/31: A = 5/31 YTD fed tax withheld - 3/31 YTD tax withheld
8/31: A = 8/31 YTD fed tax withheld - 5/31 YTD tax withheld
12/31: A = 12/31 YTD fed tax withheld - 8/31 YTD tax withheld
Then, the X - A should have the correct payment each 'quarter'.