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llamber2
New Member

I took a disbursement from my 401K earlier this year and did not withhold enough Federal. I know I am going to owe. I have the money and want to pay now. Is there a way?

I know about the 10% penalty and know in detail my tax liability. I have the money set aside and would rather pay the shortage now than I would increase my withholding by $600 each pay period from now till year end.
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4 Replies

I took a disbursement from my 401K earlier this year and did not withhold enough Federal. I know I am going to owe. I have the money and want to pay now. Is there a way?

Go to the IRS payment website, use Direct Pay and select a 2022 estimated tax payment - https://www.irs.gov/payments

llamber2
New Member

I took a disbursement from my 401K earlier this year and did not withhold enough Federal. I know I am going to owe. I have the money and want to pay now. Is there a way?

So if I do this, will there be a place on my 2022 federal tax return online where I can show that I made this payment early and have it reduce my tax liability. My goal is not not get a refund or to owe anything. I want to come out at $0. 

I took a disbursement from my 401K earlier this year and did not withhold enough Federal. I know I am going to owe. I have the money and want to pay now. Is there a way?


@llamber2 wrote:

So if I do this, will there be a place on my 2022 federal tax return online where I can show that I made this payment early and have it reduce my tax liability. My goal is not not get a refund or to owe anything. I want to come out at $0. 


Yes, on your 2022 tax return that is filed next year you would enter the estimated tax payment you made in 2022 on the tax return.

Using TurboTax -

To enter, edit or delete estimated taxes paid (Federal, State, Local) -

  • Click on Federal Taxes (Personal using Home and Business)
  • Click on Deductions and Credits
  • Click on I'll choose what I work on (if shown)
  • Scroll down to Estimates and Other Taxes Paid
  • On Estimates, click on the start or update button

Or enter estimates paid in the Search box located in the upper right of the online program screen. Click on Jump to estimates paid

 

On a 2021 tax  return - Federal estimated taxes paid are entered on Form 1040 Line 26

NOTE - Since the 2022 federal tax return, Form 1040, has not yet been released by the IRS the estimated tax payment may or may not be on Line 26.

I took a disbursement from my 401K earlier this year and did not withhold enough Federal. I know I am going to owe. I have the money and want to pay now. Is there a way?

Ending with Zero tax due and Zero refund is not going to be easy for most taxpayers.

Better to overpay by some small amount (about $100 or so). Then when that refund is direct deposited to you , you know your return was approved with no IRS changes.

 

@llamber2 

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