For determining if an underpayment penalty is due for a tax return, I have a question on the actual number used to roll up to whether a penalty is applied.
I am expecting that I will be over $150,000 on my adjusted gross income for 2022 and to avoid any underpayment penalty I was planning to make sure I pay in at least 110% of last year's income tax to be safe.
On Form 1040-ES it is stated I shouldn't need to pay estimated tax if :"You expect your withholding and refundable credits to be less than the smaller of 100% of the tax shown on your 2021 tax return."
Because my income is over $150k, I am replacing this line to say per the instructions in the sheet "110% of the tax shown on your 2021 tax return."
Would any form of tax payment for 2022, not just withholding on my paycheck, roll up to the sum of determining if I paid in 110% of last year's tax, or is it strictly withholding for the purpose of determining if I have to pay a penalty? For example, I amended my federal return for 2021 and applied the refund to my next year's tax in 2022 - would this amount be included in the value to reach 110%? Also, would manual tax payments on IRS.gov applied to the 2022 tax year be included in this value?
Basically just asking if I need to do some end-of-year math to make certain that my paycheck withholding rolls up to 110% of last year's tax, or if I could rely on for example a tax payment on Dec 26th, 2022 to get to 110%.
Thanks!
