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dja2len
New Member

Estimated Taxes

Withdrew money from my IRA to pay off our new car. Withheld and paid the IRS 10%. After completing my taxes this year with turbotax it showed that I still owe under $2500. Do I have to pay estimated taxes as this was a one time withdrawal? And if yes why does form 1040-ES Payment Voucher show due dates in 2021 not 2022?

Thanks

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3 Replies

Estimated Taxes

No you do not ... ignore the unneeded 1040-ES forms.

 

 

Why did 1040-ES estimated tax vouchers print out? Do I need them?

https://ttlc.intuit.com/community/tax-payments/help/why-did-1040-es-estimated-tax-vouchers-print-out...

Estimated Taxes

You owe taxes because the 10% you had withheld wasn't enough to cover the taxes due, plus any penalty.  As you discovered, this was an expensive way to pay off a car note.  No, you do not need to pay estimated taxes for 2022.

Estimated Taxes

You owe regular income tax (plus a 10% penalty if under age 59-1/2) from an IRA.  Any withholding is only an estimate.  Your actual tax is calculated on your tax return and you get credit for the withholding, but you probably owe more tax.

 

Depending on the amount of the withdrawal and your other tax situations, you might have been required to make an additional estimated tax payment (above and beyond the 10% withholding).  But it's too late for that now.  Now you just owe the income tax, and you might owe a penalty.   If you indicate that you will pay by check, you will get a form 1040-V voucher to attach to the check.  This will be dated 2021 since it is for the 2021 tax year.  If you pay your tax electronically, you won't get a 1040-V voucher.  

 

Separately, if you owe tax, Turbotax will sometimes give you estimated tax vouchers for the upcoming year.  In this case, since you owe for 2021, you might get 1040-ES estimated tax form for 2022.  You don't have to use them if you know you won't owe taxes or will pay what you owe in another way.  However, those 1040-ES forms should be dated for 2022, not 2021.  In my version of turbotax, I am seeing 2022 on the 1040-ES forms.   

 

 

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