topic I have to pay $8,000 as estimated taxes in 2020. next year my taxes should be around $1,600. what would be the penalty if I do not make four payments worth $8000 in 2020? in Get your taxes done using TurboTax

I have to pay $8,000 as estimated taxes in 2020. next year my taxes should be around $1,600. what would be the penalty if I do not make four payments worth $8000 in 2020?

huzoor — Sun, 05 Jul 2020 22:52:56 GMT

will the penalty be based on $8,000 or over the amount $1,000?

Re: I have to pay $8,000 as estimated taxes in 2020. next year my taxes should be around $1,600. what would be the penalty if I do not make four payments worth $8000 in 2020?

Opus 17 — Sun, 05 Jul 2020 23:23:43 GMT

I don’t quite get your question. However, a significant underpayment is calculated quarterly. For example, if you owed $8000 when you filed your return on April 15, 2021, you would have $2000 back due to the spring quarterly payment, $2000 back due to the summer quarterly payment, $2000 back due to the fall payment and $2000 back due to the winter payment. This year, both the spring and summer payments are due July 15, with the fall and winter payments due September 15 and January 15 as usual.

If you made no estimated payments you would use the short method on form 2210 and your penalty would be 3.398% of the amount you owe. If you made some estimated payments, you would calculate by quarter to determine the actual penalty amount.

Re: I have to pay $8,000 as estimated taxes in 2020. next year my taxes should be around $1,600. what would be the penalty if I do not make four payments worth $8000 in 2020?

Opus 17 — Sun, 05 Jul 2020 23:25:02 GMT

The penalty is based on the total amount of taxes due when you file your return. The $1000 is a threshold to avoid the penalty, it does not reduce the penalty if you owe one.

Re: I have to pay $8,000 as estimated taxes in 2020. next year my taxes should be around $1,600. what would be the penalty if I do not make four payments worth $8000 in 2020?

VolvoGirl — Sun, 05 Jul 2020 23:25:56 GMT

I answered your other question here

https://ttlc.intuit.com/community/taxes/discussion/i-have-to-pay-8000-as-estimated-taxes-in-2020-next-year-my-taxes-should-be-around-1600-what-would-be/01/1658241