I need clarification. Part of your response was, "However, if you still owe at least $1,000 even after increasing your withholding, then you must make some estimated tax payments. By year's end, your estimated payments (including employer withholding) must equal at least 90 percent of your tax liability for the current year or 100 percent of your tax liability from last year. If it doesn’t, you may be subject to an estimated tax penalty."
By the time I know whether I owe $1,000 or more for tax year 2023 -- when I am doing my taxes in early Spring 2024 -- it will be too late to pay estimated tax payments for 2023. What am I misunderstanding?
For 2022, I had no 1099 income and received a $13,120 federal refund due to added withholding. If I make $20,000 in 1099 income in 2023 (at the 32% tax bracket), is it likely that I need to increase my withholding even more this year?
