Facts: My federal tax for 2023 was $73,602. 110% is $80,962. Withholding was taken out evenly over the year in the sum of $21,469.00. Therefore, I computed $59,493 was owed in estimated tax. ($59,493 + $21,469 = $80,962.)
My 2023 tax refund was applied to my 2024 taxes in the sum of $19,219.
On April 15, 2024 I paid $23,000 with an extension request.
On April 15, 2024 I paid an estimated tax payment of $17,274.
The total sum of taxes paid for 2024 was: withholding $21,469; + refund $19,219; + paid with extension $23,000; + estimated tax payment $17,274 = $80,962, which is 110% of my 2023 taxes.
My understanding is that timely payment of 110% of last year's tax is a safe harbor to avoid an Estimated Tax Penalty.
Why is turbo tax showing I have to pay an Estimated Tax Penalty?
