topic When do I have to pay estimated taxes on an unexpected payment I received in mid September? in Get your taxes done using TurboTax

When do I have to pay estimated taxes on an unexpected payment I received in mid September?

tinam — Fri, 18 Dec 2020 15:07:23 GMT

Every year we receive a payment in April on a note that we have with a business and we have taxes withheld. This year the company made another unexpected payment to us in mid September with no taxes withheld. When do I have to make tax payments on that to avoid a penalty and how do I let the IRS know that I did not have this money all year long so I didn't make quarterly payments?

Re: When do I have to pay estimated taxes on an unexpected payment I received in mid September?

VolvoGirl — Fri, 18 Dec 2020 16:20:38 GMT

Yes you can send in a payment. Use the 4th Quarter coupon. Here are the Federal 1040ES instructions and blank forms
http://www.irs.gov/pub/irs-pdf/f1040es.pdf

Or pay them directly on the IRS website. Be sure to pick 1040ES payment
https://www.irs.gov/payments/direct-pay

If you have a penalty when you do your tax return, You might be able to eliminate it or at least reduce it. You can go to Federal Taxes tab under Other Tax Situations and select Start by the Underpayment Penalties. You will answer a series of questions that may reduce or eliminate the penalty. Or you can elect to have the IRS figure the penalty for you. It's form 2210.

It's under
Federal or Personal (for H&B version)
Other Tax Situations
Additional Tax Payments
Underpayment Penalties - Click the Start or update button

By the way, how were they withholding taxes on it? How did you report the withholding? Did you get a 1099R form?

Re: When do I have to pay estimated taxes on an unexpected payment I received in mid September?

tinam — Fri, 18 Dec 2020 18:13:57 GMT

Sorry for lack of clarity- I increased the taxes withheld from my paycheck to cover the April payment that we get every year. It is reported as long term gain with principal and interest and we received a 1099INT. I know I need to make a payment just wondering the time frame. If I read it right...since the payment was made in September I have to pay that payment in the last quarter which we are in. Just trying to figure out how to avoid interest and penalty. Thanks for your insight!