Applying 2023 Refund towards 2024 Taxes

[prasadbhusa]

What are the scenarios you recommend doing this, instead of paying it myself at scheduled intervals?

[AmitaR]

Good Afternoon prasadbhusa,

It depends on several factors why you would want to apply your 2023 refund towards your 2024 taxes:

1.  If you expect to have a balance due for your Tax Year 2024, then you may want to apply your 2023 refund towards 2024 Taxes.

2. Depends what type of income you have. If you have self-employment or other types of income where they don't take out any withholding as in Wages, then you are required to pay Estimated Taxes at your scheduled intervals, April 15, 2024; June 15, 2024, September 15, 2024; and January 15, 2025.  You could apply your 2023 refund towards 2024 taxes to reduce these payments or reduce your balance due or to increase your refund for 2024 tax return. 

3. If you have income from wages, but your employer is not withholding enough taxes, by applying 2023 refund to 2024 may reduce your balance due or increase refund for 2024 taxes.

You may want to use Tax Calculator to estimate your 2024 tax liability (this tool is for 2023 but you can still use it to enter your 2024 numbers to get an estimate):

Tax Calculator 

Thanks for participating in TurboTax's Ask the Expert event today. I hope this information was helpful!

Have an amazing day.

Amita R (CPA 10+ years)

[quorumof1]

Hi there:

Pro: It's one and done easy without the burden of paying quarterly. 

Con It's better to have your money working for you than giving an interest free loan  to the IRS.