TurboTax does recommend estimated payments if you have a balance due. If you're at risk for an underpayment penalty next year, TurboTax automatically calculates quarterly estimated tax payments and prepares vouchers (Form 1040-ES) for you to print. You're not required to make estimated tax payments; we're just suggesting it based on the info in your return.
Below is how estimated payments are calculated:
Based on your 2023 tax info, we’ll use the lower of the following IRS-approved methods to calculate your estimated tax payments.
- 90% of your estimated 2024 taxes
- 100% of your actual 2023 taxes (110% if your adjusted gross income was higher than $150,000, or $75,000 if Married Filing Separately)
There are two additional IRS-approved methods available:
- 100% of your estimated 2024 taxes
- 66 2/3% of your estimated 2024 taxes (farmers and fishermen only)
If you’d like to use one of the additional methods, answer Yes to the question Do you want to adjust your income or deduction? on the Review Your Estimates for 2024 screen. Once you review your income and deductions, you’ll have the option to select from any of the four methods. For additional information: How Does TurboTax Calculate My Estimated Taxes
You pay your balance due by the due date of the return and that is probably why no penalties from the IRS. It is better to pay the quarterly estimated taxes to avoid interest and penalties. The penalty amounts are based on the amount due.
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