topic Prepay taxes based on windfall from previous year? in After you file

Prepay taxes based on windfall from previous year?

sgtoox — Tue, 10 Mar 2026 04:45:32 GMT

I had a significant income boost the previous year in 2021 from side income via 1099 earning interest on things like crypto, which is not available to me in 2022, so I will not be seeing anything remotely close to the 1099 income I saw in 2021, in 2022. When filing taxes for 2021 Turbotax obviously suggested I prepay taxes for next year so I would not be hit with any penalties. I already sent in the first pre payment in April along with the actual taxes I owed for 2021.

My question is, since I will not be making a fraction of that extra 1099 income (which was the reason my taxes were underpaid for 2021 at filing time) do I need to prepay taxes for 2022 beyond what I normally have taken out of my normal W2 paychecks? The prepayments are working off of the assumption I will be making as much side income with 1099 in 2022 as I did in 2021 which is not the case. Are there any repercussions for simply not sending the remaining 3 prepayments this year? I imagine I will be getting all of it back as a tax return anyways since I am not actually making that extra 1099 income this year, but was afraid to not follow through with the suggested prepayments at the time of filing taxes.

Re: Prepay taxes based on windfall from previous year?

VolvoGirl — Sun, 22 May 2022 22:59:54 GMT

No, the estimates are optional to pay. You can ignore them. They don't get sent with your return and the IRS won't be expecting them.

Re: Prepay taxes based on windfall from previous year?

sgtoox — Mon, 23 May 2022 01:28:33 GMT

Thank you so much for the quick reply

Re: Prepay taxes based on windfall from previous year?

Mike9241 — Mon, 23 May 2022 04:36:19 GMT

i'm assuming your 2022 tax will be more than $1,000. thus to avoid penalties your withholding and estimated tax payment must be 90% or more of your 2022 tax or 90% of your 2022 tax less withholding (but not estimates) must be less than $1,000