Have you already entered the amount of estimated taxes you paid in 2020? The deferral amount can't (or it shouldn't be) be more than your tax liability.
The deferred deposits of the employer's share of Social Security tax must be deposited by the following dates (referred to as the "applicable dates") to be treated as timely (and avoid a failure to deposit penalty):
- On December 31, 2021, 50 percent of the eligible deferred amount; and
- On December 31, 2022, the remaining amount.
How does TurboTax calculate my estimated tax payments? Please see the following Q&A from the IRS......
Q22. Is there a penalty for failure to make estimated tax payments for 50 percent of Social Security tax on net earnings from self-employment for the payroll tax deferral period?
A22. No. For any taxable year that includes any part of the payroll tax deferral period, 50 percent of the Social Security tax imposed on net earnings from self-employment attributable to the payroll tax deferral is not used to calculate the installments of estimated tax due under section 6654 of the Internal Revenue Code. This means that self-employed individuals that defer payment of 50 percent of Social Security tax on their net earnings from self-employment attributable to the period beginning on March 27, 2020, and ending on December 31, 2020, may reduce their estimated tax payments by 50 percent of the Social Security tax due for that period.
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