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catmar26
New Member

Can someone explain why Turbotax suggested I pay estimated state tax for 2021, when it's a relatively small amount? Do I *have* to pay early b/c of the vouchers issued?

I paid the 2020 tax due already, and the vouchers were issued in the same amount, I suppose estimating I'll owe again next year. Can I simply wait until next year to address that when do my 2021 taxes?
3 Replies
VolvoGirl
Level 15

Can someone explain why Turbotax suggested I pay estimated state tax for 2021, when it's a relatively small amount? Do I *have* to pay early b/c of the vouchers issued?

You can ignore them.  The estimated payments are optional to pay. They are estimates for next year. Turbo Tax doesn't want you to owe next year. They might have printed out if you got a one time large income this year. Like if you took a IRA or 401K distribution.  They DO NOT get sent to the IRS or state with your return.

 

You might want to adjust your withholding at work so you won't owe too much next year.  They don't get sent with your tax return to the IRS or state.

Mike9241
Level 15

Can someone explain why Turbotax suggested I pay estimated state tax for 2021, when it's a relatively small amount? Do I *have* to pay early b/c of the vouchers issued?

apparently, your withholding will not be 90% of 2021 tax or 100% (110% if AGI over $150K) of 2020 tax. if your withholding does not equal or exceed either of these amounts or your taxes less withholding for 2021 is more than $1000, you will be subject to underpayment penalties. 

 

the first qtr estimate was due 4/15/2021, next 6/15/2021, then 9/15/2021 and finally 1/17/2022

 

 

Opus 17
Level 15

Can someone explain why Turbotax suggested I pay estimated state tax for 2021, when it's a relatively small amount? Do I *have* to pay early b/c of the vouchers issued?

If you owe more than $1000 next tax time, you can be assessed a penalty for not having enough tax withheld during the year, even if you pay in full when you file.  To avoid this problem, you can adjust your withholding, or make estimated payments.  If you make estimated payments online at www.irs.gov/payments, you don't need the vouchers, because your online payment is recorded under your SSN.  You only need the vouchers if mailing a paper check.  The amount of the vouchers may not be correct for your situation, as they are only based on your 2020 information.  Depending on your income and withholding for 2021, you might owe more or less than estimated on the vouchers. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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