You do not have to clear and start over yet. If your taxes are up to date and you don't owe anything you do not have to pay estimated taxes.
If you have a 1040-ES voucher for the current year you do not have to pay it. The IRS knows if you owe taxes and they want their money as soon as possible, but you will not get a tax notice if you don't pay estimates. You may however, be subject to penalties and interest.
The underpayment penalty may apply if :
- The amount of tax you paid during the tax year is less than 90% of the tax that you owed for the current year.
- Example: in 2020 you had $8,500 withheld in taxes. Your 2020 tax return shows that you owe $10,000. That is less than 90% and there will be a penalty.
- The amount you paid during the tax year didn’t at least equal 100% of your taxes owed the prior year.
- Example: Your 2019 tax return showed that you had $9,000 as a total tax obligation. You paid $9,001 in withholdings in 2020. Your 2020 tax bill comes in at $20,000. There is no penalty because you paid 100% of the 2019 tax.
- The IRS also says you can probably avoid the penalty if the amount you owe is less than $1,000, after subtracting withholdings and refundable credits.
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