Get your taxes done using TurboTax

Just because TurboTax generates estimated payment recommendations doesn’t mean you have to follow them. If you know that you will not receive this special lump sum income in a particular year and that your regular withholding will cover your tax, you don’t need to make the estimated payments.

 

To avoid a penalty for the present year (whichever year that is) you can either pay 110% of the tax liability from the previous year, or pay at least 90% of your present tax liability or pay just enough in estimated taxes that you owe less than $1000 when you file.  There is no specific requirement that you must pay 110% of the previous year’s tax liability if you know your present year liability will be less, as there are the  2 other criteria to avoid a penalty.