Can I change the 2021 estimated tax payment that turbotax includes as a part of the tax docs? My tax situation will change next year.

[mesquitebean]

@ lfarris40   asked:   "Can I change the 2021 estimated tax payment that turbotax includes as a part of the tax docs? My tax situation will change next year."

NOTE:  This answer assumes you are asking about Federal estimated tax payments.

Have you already filed the 2020 return?    If so, here's how to open your already-filed return back up to go through the estimated taxes interview, calculate estimated tax payments, and print out new 2021 Form 1040-ES vouchers, if desired.

NOTE:  When you open your return back up, do not make any changes in the return itself if it's already been filed.   It's OK to go through the estimated taxes interview.

You can go through the section "W-4 and Estimated Taxes" to figure your customized 1040-ES quarterly tax payments for 2021.    There is also a place in that interview to enter what you have already paid for 2021 (if applicable), and it will let you include any expected income changes or any other changes you have for 2021.

• Log in, and here's how to open your return back up:
• At the Tax Home or in the section "Your Tax Returns & Documents" for tax year 2020, look for a link "Add a State."
• Click on "Add a State."  (you don't really add one; that's just to get the return to open back up.)
• Once the return is open, click in the left menu column on Federal.
• Then at the top choose tab "Other Tax Situations"
• You may then see a screen "Your uncommon Tax Situations"
• Look for a button to open up "All uncommon situations" to get a list of topics.
• Scroll way down to the last category "Other Tax Forms" and click "Show More."
  
• Find topic "Form W-4 and Estimated Taxes" and click Start or Update.
• If you need to adjust withholding, go through the W-4 interview.
• If you don't need the W-4 (withholding) interview, you can skip that part and go to the 2021 estimated taxes interview.
• You may get a screen that says "Review your Estimates for 2021?" and asks "Do you want to review your income or deductions".  Say YES (or Review Now), so you can get to the additional questions.
• You will go through a lot of screens asking about expected income and deductions.
• Finally, you will come to a screen that says "Enter Payments You Expect to Make."
• There are some boxes there that say "Enter estimated tax payments you've already made for 2021."
• Next screen will ask "which method" to use to calculate your 2021 estimated payments.
• Next screen will ask if you want to print vouchers.
• If you want to pay the estimated taxes electronically instead of mailing the vouchers and payments, watch for my next answer below which explains those options.

[mesquitebean]

@ lfarris40   asked:   "Can I change the 2021 estimated tax payment that turbotax includes as a part of the tax docs? My tax situation will change next year."

NOTE:  This answer assumes you are asking about Federal estimated tax payments.

Have you already filed the 2020 return?    If so, here's how to open your already-filed return back up to go through the estimated taxes interview, calculate estimated tax payments, and print out new 2021 Form 1040-ES vouchers, if desired.

NOTE:  When you open your return back up, do not make any changes in the return itself if it's already been filed.   It's OK to go through the estimated taxes interview.

You can go through the section "W-4 and Estimated Taxes" to figure your customized 1040-ES quarterly tax payments for 2021.    There is also a place in that interview to enter what you have already paid for 2021 (if applicable), and it will let you include any expected income changes or any other changes you have for 2021.

• Log in, and here's how to open your return back up:
• At the Tax Home or in the section "Your Tax Returns & Documents" for tax year 2020, look for a link "Add a State."
• Click on "Add a State."  (you don't really add one; that's just to get the return to open back up.)
• Once the return is open, click in the left menu column on Federal.
• Then at the top choose tab "Other Tax Situations"
• You may then see a screen "Your uncommon Tax Situations"
• Look for a button to open up "All uncommon situations" to get a list of topics.
• Scroll way down to the last category "Other Tax Forms" and click "Show More."
  
• Find topic "Form W-4 and Estimated Taxes" and click Start or Update.
• If you need to adjust withholding, go through the W-4 interview.
• If you don't need the W-4 (withholding) interview, you can skip that part and go to the 2021 estimated taxes interview.
• You may get a screen that says "Review your Estimates for 2021?" and asks "Do you want to review your income or deductions".  Say YES (or Review Now), so you can get to the additional questions.
• You will go through a lot of screens asking about expected income and deductions.
• Finally, you will come to a screen that says "Enter Payments You Expect to Make."
• There are some boxes there that say "Enter estimated tax payments you've already made for 2021."
• Next screen will ask "which method" to use to calculate your 2021 estimated payments.
• Next screen will ask if you want to print vouchers.
• If you want to pay the estimated taxes electronically instead of mailing the vouchers and payments, watch for my next answer below which explains those options.

[mesquitebean]

@ lfarris40     See the info I left you above on how to figure Federal estimated tax payments and prepare new vouchers.  There are also a couple of electronic options to make Federal estimated payments that require no paperwork and no mail.

One easy way is to make 1040-ES quarterly payments by using IRS Direct Pay electronically, and nothing has to be filled out and mailed.

https://www.irs.gov/payments

If paying electronically at the IRS Direct Pay site, there is no fee to have it taken directly out of your bank account.  There is a service fee for paying by credit/debit card, however.   If you decide to make a payment there out of your bank account,  for "Reason for Payment" choose "Estimated tax".  For "Apply Payment To" choose "1040-ES".  Then choose the tax year you're paying.  Then it will ask you to Verify Identity.

Should you decide to pay there, then print out a confirmation for your records.

The advantage of IRS Direct Pay is that it doesn't require an initial pre-enrollment, unlike EFTPS which I'll explain in the next paragraph.

While you can use IRS Direct Pay each quarter, if desired, if you think you are going to be making quarterly payments for a long time into the future, then you may want to consider opening a free account at the US Treasury's EFTPS website (Electronic Federal Tax Payment System.)  You can even schedule quarterly payments in advance and make other types of Federal tax payments, such as a balance due on your Form 1040, etc.  For first time use, you have to set it up in advance with your banking info, and they send you a PIN in postal mail.  Once set up, you can then make online payments there at the EFTPS website, or payments can be made by phone with the PIN.   For more info on EFTPS, there is an extensive FAQ page in the left menu column at this link:

https://www.eftps.gov/eftps/

[proud_american]

The TurboTax software needs to make it much easier to find the option for estimating next year's quarterly taxes. I've never done quarterly before, but I just earned a large capital gain, so I have to start. Here was how I wasted this evening trying to figure it out:

• Open TurboTax desktop 2020
• Click "Start New Return"
• TurboTax 2020 asks me to select a 2019 file for review. I want to start an estimated taxes file for 2021, not 2020.
• Click "cancel"
• Click "Continue 2020 Return"
• I don't see any option for continuing into 2021
• Google for answers. The top result: https://turbotax.intuit.com/tax-tips/small-business-taxes/estim[product key removed]n-questions/L1lu...
  
  • Says to fill out Form 1040-ES. I try to do this manually, can't figure it out.
• Next Google result: https://turbotax.intuit.com/tax-tips/small-business-taxes/estimated-taxes-how-to-determine-what-to-p...
  • Doesn't say where to go in the TurboTax software to start estimating 2021 quarterly taxes
• Next Google result: https://ttlc.intuit.com/community/tax-payments/help/how-does-turbotax-calculate-my-estimated-tax-pay...
  • It says to click on the "Review Your Estimates for 2021 screen". Where is this screen?
• Finally find this thread. https://ttlc.intuit.com/community/taxes/discussion/re-can-i-change-the-2021-estimated-tax-payment-th...
  • Says to go through the section "W-4 and Estimated Taxes". I don't see this section in my 2020 TurboTax desktop file. Probably because I didn't file estimated taxes last year.
  • I see later it says to choose tab "Other Tax Situations", then "uncommon Tax Situations". FINALLY, this is the solution. Why is this not easy to find within the TurboTax software or within the TurboTax blog articles?

[mesquitebean]

@proud_american 

Sorry you wasted all that time but am glad you have now gotten it done.    This is mainly a user community forum so we can't always tell you the "whys", but can help you get to the right place, which you finally figured out with my steps above.   There are a lot of areas where programming and navigation could be improved.  Some topics like this one are indeed non-intuitive.

The steps I provided above were for a user using Online TurboTax, so they differ a bit from your desktop software, but the general navigation principle is the same--to get to "Other Tax Situations" then "Other Tax Forms" and then the "W4 and Estimated Taxes" interview.    Of course, the method for opening the already-filed return back up is different in Online TurboTax than desktop software.

[stevmg]

Use IRS.gov direct pay to pay on line. Easy.

[Arlene525]

I messed up and Turbo Tax calculated that we didn't have to pay estimated taxes.  Could we still just use the irs.gov website to pay estimated taxes even though it is not indicated on our tax return?

[JohnW152]

Yes, you can.  

Please see the IRS’ Estimated Taxes page for more computation and payment information.  

However, to edit your Estimated Tax Payments information in TurboTax Online:

1. If you’re on the Hi TurboTax Client, let's keep working on your taxes! screen, click the Pick up where you left off button.  Otherwise, 
2. Click Federal in the left pane, if you’re not already there
3. Click Income & Expenses in the banner
4. Scroll down and click Show more to the right of Estimates and Other Taxes Paid
5. Select Start to the right of Estimated Tax Payments
6. On the Estimated taxes screen, select Edit to the right of 

• Federal estimated taxes for 2021 (Form 1040-ES)
• State estimated taxes for 2021
• Local estimated taxes for 2021
• 2020 state estimated taxes paid in 2021 or
• 2020 local estimated taxes paid in 2021

as appropriate

Enter all relevant information on the subsequent screens.

@Arlene525

[stevmg]

In the past , my “real ES” became much greater than the original ES calculated when the 1040 was originally calculated. This was due to an unanticipated windfall.  We merely calculated the difference and sent in the increase in the ES at the appropriate remaining payment times (June 15, September 15, January 15). That’s all. When the subsequent 1040 was calculated the next year the appropriate real total ES contribution was annotated which had included the increased payments. All went OK and the tax and payments went through without a hitch. So, yes, you can use IRS. gov to pay your “new” ES BUT be sure to do two things: 1) check the e-mail confirmation of payment to be sent to you and 2) identify the payment(s) as an estimated tax payment(s).

[kayla-pruett66]

Hopping on this thread that is somewhat related to my question - 

can I make fewer than four estimated tax payments for 2022?

I have W-2 and self-employment income (I took on some SE contract work late in 2021). In anticipation of the self-employment income, I already increased my withholding at my W-2 job. I would still like to make quarterly payments. However, the first quarterly payment will be due the same day our tax bill for 2021 is due. 

I'd like to start with the payment due in June. I'm aware there may be an underpayment penalty, but there's no problem with making just three quarterly payments, is there?

thanks.

[AliciaP1]

Yes, you may choose to make the payments or not.  You stated you recognize the consequence of the underpayment penalty and that is the only issue that may arise if you do not make sufficient payments for taxes during the year.

@kayla-pruett66

[JKQ888]

I’m new to estimated payment. I always withheld more on my W2 in the past. I’m wondering how does IRS know my estimated quarterly payment due if I pay direct on IRS website instead of mailing a check with the voucher? Do I must have TurboTax calculate the estimated payment on tax return before I can start paying estimated tax payment for next year? For example, if I anticipate the total tax liability to be $20k, do I must pay $5k each quarter? Can I pay in different amount, such as $3k first quarter, $2k 2nd quarter, $5k 3rd quarter and the remaining $10k the last quarter? As long as I pay the entire $20k estimated tax payment/tax liability before the due date of last quarter, do I need to worry about underpayment penalty or any kind of consequences? Thanks!

[VolvoGirl]

@JKQ888  If you have a tax due on your 2022 return Turbo Tax might print out the 1040ES Estimated slips.  But they are optional to pay.  And you can adjust them.  You can pay them directly to the IRS online.  When you prepare your return next year you will have to manually enter them into your tax return.  So keep a list of your payments and date you paid it.

To prepare estimates for next year you start with your current return, but be careful not to change anything.  If you can't get back into your return, Click on Add a State to let you back into your retun.

You can just type W4 in the search box at the top of your return , click on Find. Then Click on Jump To and it will take you to the estimated tax payments section. Say no to changing your W-4 and the next screen will start the estimated taxes section.

Or Go to….

Federal Taxes or Personal (Deskop H&B)

Other Tax Situations

Other Tax Forms

Form W-4 and Estimated Taxes - Click the Start or Update button

And in the Desktop program you can switch to Forms and open the Estimated Tax Payments Options sheet.  You can even select to print the estimates with just your personal info and no amounts.  You  can play with and tweak the amounts.  You can open the individual 1040ES forms and override the amounts.  

See,

https://ttlc.intuit.com/community/tax-payments/help/can-turbotax-calculate-next-year-s-federal-estim...

You must make quarterly estimated tax payments for the current tax year if both of the following apply:

- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.

- 2. You expect your withholding and credits to be less than the smaller of:

    90% of the tax to be shown on your current year’s tax return, or

  100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months).

[JKQ888]

Thank you so much for the quick response. I want to make sure I understand it correctly. If I won’t owe more than $1,000, can I just pay a lump sum in one payment before the last quarter due date? For example, if I my tax liability is $18k for 2023, can I pay $20k on 1/15/2024? In this situation, I won’t owe anything and will get a refund instead. Is there any consequences I’m not aware of? Thanks

[BrittanyS]

In addition to Volvogirl's statement, the IRS has a few methods to calculate your estimated tax payments.  

1. 90% of your estimated 2023 taxes
2. 100% of your actual 2022 (110% if your adjusted gross income was higher than $150,000 or $75,000 if Married Filing Separately)
3. 100% of your estimated 2023 taxes
4. 66 2/3% of your estimated 2023 taxes for farmers and fishermen only

Your payments should be made in equal payments to avoid a not prepaying penalty.  However, if you receive income unevenly during the year, you may be able to vary the amounts of the payments to avoid or lower the penalty by using the annualized installment method.

@JKQ888