Here's my situation, roughly:
- 2022 tax liability: ~$80k
- 2023 tax liability: ~$130k
- No 2023 withholdings or estimated taxes paid to-date
- ~$3k of tax liability was incurred in Q3; the remainder was incurred in Q4 ($0 in Q1 and Q2)
- So I am using 2210AI to calculate the penalty owed
However, it's not clear to me how much I need to submit for a 2023 estimated tax payment by 1/15/2024 in order to minimize the estimated tax underpayment penalty.
After I indicated in the step-by-step that I would pay the balance due on 1/15/2024, Turbo Tax is entering the full $130k amount in Form 2210 Row 11: Estimated Tax Paid, column (d) 1/15/2024 and I don't seem to be able to adjust that value. (If I override the value on Row 11, nothing else changes, and when I trace it back to the Tax Payments Worksheet, there are no values are entered in the Estimated Tax Payments for 2023 section and my changing the value for the Federal 1/15/2024 entry has no effect on Form 2210 Row 11 or otherwise, other than reducing the overall "Federal Tax Due" value). Form 2210 Row 10 is showing lower amounts, with Q3 + Q4 entries equal to ~$88k, which I believe to be the safe harbor value of 110% of prior years' tax liability.
So, my questions are:
- Which amount do I need to pay to minimize underpayment penalties? The $88k or the $130k? I would think it's the $88k, but am confused by the $130k.
- Once I do settle on an estimated tax amount to pay by 1/15/2024, I then need to manually add it as an Estimated Tax Payment in Turbo Tax?
