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Bypass trust estimated tax calculation

I have a Bypass trust which files tax return for investment income each year. In 2021. there was very little income earned. As a result, the tax liability for federal is only a few hundred dollars and there is no tax liability for CA tax (I live in CA). My tax accountant calculated my 2022 estimated tax for the trust and showed a few hundred dollars for Federal tax, but more than $40K for CA tax (She simply applied all my CA refund in the amount of more than $40K to my 2022 estimated tax). I ask her how come my state estimated tax is so much and it is more than Federal tax. She told me that federal estimated tax is calculated based on my 2021 tax return, but state estimated tax follows $2020 tax return. Since I have applied all my tax refund in 2020 to my 2021 estimated tax, therefore, I should again apply all my 2021 refund to my 2022 estimated tax. It totally make no sense to me.  Is my accounted correct for 2022 CA estimate tax calculation (I.e., based on 2020 tax, not 2021 tax)?

 

Thank!

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Accepted Solutions

Bypass trust estimated tax calculation

Take a look at the FTB web site at the link below.

 

https://www.ftb.ca.gov/forms/2021/2021-541-es-instructions.html

 

As a general principle, you should follow your tax accountant's advice unless you firmly believe that it is in error, in which case you should get a second opinion from another local tax professional.

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2 Replies

Bypass trust estimated tax calculation

Take a look at the FTB web site at the link below.

 

https://www.ftb.ca.gov/forms/2021/2021-541-es-instructions.html

 

As a general principle, you should follow your tax accountant's advice unless you firmly believe that it is in error, in which case you should get a second opinion from another local tax professional.

Bypass trust estimated tax calculation

Thanks for the advice. I think I will just go with what my tax accountant has suggested. After all, any overpayment will be refunded at the end of tax year. 

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