topic Estimated Quarterly Tax Payments- Automated Process in Get your taxes done using TurboTax

Estimated Quarterly Tax Payments- Automated Process

Rcastel — Wed, 28 Jun 2023 19:14:26 GMT

Hi-
I checked with my Financial Advisor and he stated it was best to check with a Tax Advisor. In simple terms, I'm looking for a solution to quickly and efficiently estimate my Federal and State income quarterly tax liabilities in order to accurately pay the quarterly amount due. Both the IRS and Illinois DoR require estimated payments are sent on around January 15, April 15, July 15, and October 15.
I have one brokerage account that generates income and with quarterly returns that fluctuate significantly during the year, so it's difficult to estimate the taxes per quarter. Turbo Tax automatically calculates taxes due for the year using the Document ID from the year end statement, which is great, but would to have something like that in order to pay quarterly taxes more accurately.
Any suggestions would be welcome.
Thank you.
[email address removed]

Re: Estimated Quarterly Tax Payments- Automated Process

Jackstar221 — Wed, 28 Jun 2023 19:28:52 GMT

Here is a link to the IRS withholding estimator, that you can use for your federal taxes. Just fill it out, it takes about 15 minutes, but you do you need all your tax information ready, such as pay stubs, etc:

https://www.irs.gov/individuals/tax-withholding-estimator

In addition, here is a link to TurboTax taxcaster, that you can also use for federal taxes:

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

Here is an Illinois tax calculator:

https://smartasset.com/taxes/illinois-tax-calculator

In addition, if you ended up owing in either federal or state, I would suggest using the amount you owed in the previous year. If you didn't really have any changes, and let's say for instance you owed $200 to federal last year, I suggest just dividing that $200 by 4 and making $50 quarterly payments.

If you have any further questions, feel free to contact TurboTax at 1-800-446-8848.

Thank you,

John

CPA

Re: Estimated Quarterly Tax Payments- Automated Process

Hal_Al — Thu, 29 Jun 2023 12:13:45 GMT

TurboTax (TT) can prepare the quarterly payment vouchers. In your 2022 software, enter at:

Federal Taxes or Personal (H&B version)

-Other Tax Situations

-Other Tax Forms

-Form W-4 and Estimated Taxes - Click the Start or Update button

On the next screen answer No to the W-4 question

Re: Estimated Quarterly Tax Payments- Automated Process

fanfare — Thu, 29 Jun 2023 13:01:01 GMT

By default, Form 2210 requires evenly spread Estimated tax + withholding installments.

you must estimate your total tax for the year,
you can base your estimate on prior year's tax , or 90% of this year's tax, whichever is smaller.
each quarter your estimated tax paid and withheld must be at least 25% of the estimate, even if your income is uneven,
if your estimate is based on 90% of this year's tax and turns out to be wrong you may be penalized.
you can compensate by overestimating.
if your estimate is based on prior year's tax, you know that when you file by April 15, which is also the first estimated tax payment due date. How convenient.

If your quarterly withholding and estimates in 2023 are at least 100% / 4 = 25% ( 110% / 4 for certain high income taxpayers) of your 2022 tax, there will be no penalty on your 2023 tax return, regardless of any jump in income.
you are protected from a sudden capital gain or bonus at year end.

@Rcastel