What happens if you make way less the next year and you cannot afford to make the quarterly payment and in fact that amount would be an over payment because you are making less? Can you just pay less or do you have to call the IRS and get new coupons or what?
On the flip side what if you make way more? Are you required to add to your quarterly payments and if so how do you know how much more to add?
Thanks!
Kelly
Hi kelly29439taxes,
The coupons that you refer to are 1040-ES. The amounts listed are for estimated taxes only. If there is a substantial drop in income, you should consider reducing those payments to reflect the actual income you expect to receive. By the same token, if your income increase substantially, you should increase the amount of payments made.
Here is a link for a tax calculator: https://turbotax.intuit.com/tax-tools/calculators/taxcaster/
This calculator can be used to refigure your taxes due and you can adjust your payments accordingly.
Here is a link for more 1040 ES forms if needed:
https://www.irs.gov/pub/irs-pdf/f1040es.pdf