topic answered in State tax filing

answered

Bigtaxtrouble — Tue, 16 Nov 2021 00:19:59 GMT

thanks

Re: California safe habor over 1 million

Bsch4477 — Sat, 06 Nov 2021 01:01:29 GMT

Certainly paying estimated tax will lower any penalty but with an income of over a million dollars and not knowing your tax liability from last year a complete answer to your question is not possible. You would be well advised to consult a tax preparer.

Re: California safe habor over 1 million

Bigtaxtrouble — Sat, 06 Nov 2021 01:09:14 GMT

CA married filing jointly tax liability for 2020 was $12,066 and owed $679 at end of year. If I pay at least 100% of taxes due for 2021 by the end of this year, will I still have an underpayment penalty for not paying earlier using the estimated tax schedule?

Re: California safe habor over 1 million

fanfare — Sun, 07 Nov 2021 09:59:53 GMT

In situations like this, if you paid at least as much as your tax due last year, there is no estimated tax penalty on a windfall increase in income.

That's the rule for the IRS.

You have to read the instructions for CA estimated taxes to verify that your state conforms.

Re: California safe habor over 1 million

ronwilensky — Wed, 29 Dec 2021 08:35:38 GMT

The California FTB safe harbor rules are as follows. However if 2021 AGI is much larger than 2020 AGI but you have still paid 110% of the 2020 tax due, TurboTax calculates a penalty anyway. Is this an error in TurboTax?

"If you’re required to make estimated tax payments and your prior year California adjusted gross income is more than:

$150,000
$75,000 if married/RDP filing separately

Then you must base your estimated tax based on the lesser of:

90% of your tax for the current tax year
110% of your tax for the prior tax year (including alternative minimum tax)