Can Turbo Tax Full Service help me figure out my 2022 estimated quarterly tax payments? My expert said they can only help with 2021 RETURNS.

[bosso3]

I don't know the limits of your specific product.  I do know that some turbotax product help with this, but you may have to pay for that product.

Additionally, You have several choices.  The most accurate will likely be the first or last.

1)  Use the IRS form and do it manually.  See

https://www.irs.gov/newsroom/basics-of-estimated-taxes-for-individuals   and

https://www.irs.gov/pub/irs-pdf/f1040es.pdf

2)  If your primary source of income is from wages or salaries, use the IRS W-4 calculator to help you determine your withholding.  See  https://www.irs.gov/individuals/tax-withholding-estimator

3)  If

a)  Your quarterly income is about the same in each quarter, AND

b)  you expect your 2022 income and deductions, credits and taxes to approximately equal your 2021 income,

THEN look at your 2021 total taxes Form 1040, line 24, Total Taxes and divide by 4 and make 4 equal payments in each quarter.  Use Form 1040-ES.

4)  If you expect your 2022 income will increase or decrease a bit, but not substantially, you can use the expected percent change to increase or decrease your expected taxes (see #3 above), and make payments accordingly.

5)  If none of the above apply, you may want to reconsider #1, or consult an outside tax consultant or accountant.

[amandac1577]

I'm fairly sure I have the most expensive Turbo Tax product, Full Service Premier.  Which product do you think can help with this?  My income varies wildly from year to year because the vast majority of it is stock from my employer, and our stock price is volatile.  That's why I need a professional to help me figure out my estimated quarterly tax payments, and if they can't help me with this then the product was a bit of a waste for me.

[bosso3]

Thank you for your reply.  Before starting with a different product, I suggest asking the question of your full service person: HOW do I get my 2022 estimated taxes done?  However, you should understand that since you say your income varies wildly from quarter to quarter, and year to year, calculating your estimated taxes will likely need to be done on a quarterly basis.  I suspect the turbotax 2021 products are set up to do this more on a once-and-done basis, and may not exactly fit your specific situation.

Given the above, I found the following site which describes how to produce 1040-ES reports from turbotax products:  https://ttlc.intuit.com/community/after-you-file/discussion/how-do-i-print-2022-1040-es/00/2489528

Personally, I purchased and used the 2021 Turbotax Deluxe Desktop software for my 2021 taxes.  I have used TT Deluxe for years.  I was able to follow the instructions in the above link and walked through the 1040-ES conversation.  So, I verified this procedure is available in this product.  (You may need a different product.  For comparison of the products see https://turbotax.intuit.com/personal-taxes/compare/desktop/  )

I use the desktop product vs the online product for various reasons.  The one most pertinent here is that it allows you to save your 2021 tax file, make a copy of it (with a different name) and then revise and change it, to run "what-if" alternative scenarios to see how changes in income or deductions or exemptions would affect your (2021) taxes.  I use this method as a proxy to estimate what my 2022 tax payments should be, and then manually file 1040-ES statements and payments.

Some end notes: 

1)  If you purchase a desktop product, it is likely that you may not be able to download the info from your 2021 taxes.  As I understand it, TT is not set up to do that.  I don't know why.  This is just an advance notice.  However, if desired, you could manually enter your 2021 data from your printed or online copy of your return.  Given the variability of your income, this may or may not be useful.

2)  I don't understand how the variability of your company's stock price impacts your income.  You only pay capital gains or losses when you sell stock.  Unless you are selling stock on a regular basis, I don't see how that affects your income.

3)  If doing all this yourself seems to be too much, you always have the alternative of using an accountant or tax consultant to prepare your taxes, and provide advice.

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[amandac1577]

Thanks. My RSUs get treated as income on my W-2 on quarterly vesting dates, so the stock price on the vesting date is what matters.  The stock price was dramatically higher last year than this year, and I don't want to pay estimated quarterly taxes based on my previous year's income which is likely at least 60% higher than this year's income will be. But I don't want to underestimate and end up getting penalized either.  I am definitely interested in just paying someone to figure all of this out for me, which is what I thought Full Service offered

[bosso3]

Thanks.  Now, I understand.  And I think you understand the situation.

I'll summarize: 

You can read about the underpayment of estimated tax penalty and how to avoid it here:

https://www.irs.gov/payments/underpayment-of-estimated-tax-by-individuals-penalty 

"To avoid a penalty, pay your correct estimated taxes on time. Find how to figure and pay estimated taxes.

You may avoid the Underpayment of Estimated Tax by Individuals Penalty if:

• Your filed tax return shows you owe less than $1,000 or
• You paid at least 90% of the tax shown on the return for the taxable year or 100% of the tax shown on the return for the prior year, whichever amount is less.

Thus, if you expect your 2022 income to be significantly less than 2021, you can be very safe, and pay 100% of the tax shown on the return for the prior year (2021).  This would likely result in a large refund for your 2022 tax return.  You said you want to avoid this.

To be more accurate with your 2022 estimated taxes will require performing the estimated tax calculations quarterly, which I discussed in my previous post.

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[ETFtrader]

If your vested RSU's are handled by your employer and included in your W-2 as income then the employer is required to withhold taxes on those RSUs.  At each vesting you should be getting a stub (like a payment stub) that breaks out all the tax withholding amounts for the amount of vested RSUs. The shares you receive as a result of the vesting will appear in your brokerage account and the cost basis of those share would be equal to the income that was reported on the stub (plus any payment you made for those shares). If you sell those shares later, that will be the cost basis used for calculating a capital gain or loss. BOTTOMLINE: Unless you sell your shares after vesting and have a capital gain, there should be no estimated tax due as your employer is already withholding taxes on your vested RSUs. Employers are legally required to withhold taxes on vested RSUs. The only exception is an 83(b) election, which probably doesn't apply in your situation.

[bosso3]

The debate about whether or not an employer withholds taxes is beyond my area of expertise.

I did find the following 2 links that discuss reporting RSUs.

IRS Site:  https://turbotax.intuit.com/tax-tips/investments-and-taxes/how-to-report-rsus-or-stock-grants-on-you...

Not IRS site:  https://www.thecompensationconnection.com/2020/07/06/[product key removed]-payroll-tax-administratio...  

I recommend talking with your employer and discussing withholding with them, likely the payroll administrator.  However, if your employer does not withhold the proper amount, or if they don't withhold adequate FICA taxes, you will likely need to file quarterly estimated taxes.  If that is the case, my previous comments on how to calculate these quarterly estimated taxes apply.

I am copying @VolvoGirl  , who I have found to be very knowledgeable, hoping she can add her expertise to this discussion, or refer it to another expert.

[DavidF2]

I use TurboTax Deluxe.  I pay 2022 quarterly taxes Federal & State.  I am retired and have started  "work from home" at the convivence on my employer.  My employer is in Tennessee and I live in Alabama so the work and home rules do not apply, Correct?  My income is variable with capital gains and Sch E royalties.  TurboTax is good for Estimated Federal tax but not good for Estimated State taxes.  The estimate state taxes use 2021 W2 withholding to estimate 2022 withholding for AL Estimated Taxes.  Can you modified the 2022 Deluxe TurboTax program to include support details for changes in the estimated withholding?  The current program only allows an over ride but does not allow including support details.  It is a great program but needs more flexibility in today's economy.  Add permissions for support details wherever it possible.  Thanks....           

[bosso3]

@DavidF2  I suggest you read my first response in this thread.

Also, if you want to get more specific "what if" alternatives and estimates using turbotax, you can buy and use the desktop version of whichever product you currently used.  The latest version available is for tax year 2021.  I use this for my estimated taxes, assuming 2022 will be similar to 2021.  (That is not always a good assumption, but it is good enough for me and my estimates.) 

If you choose to do this, make a copy of your 2021 return, and give it a different name, so you do not overwrite your 2021 return.  Then you can make any modifications that you care to, based upon your knowledge of what has happened in 2022, and estimates of what will happen in the remainder of 2022.  This will give you a pretty good idea of what your 2022 taxes will be, and you can compute your estimated tax payments from that.  This includes your state taxes.

Lastly, regarding your question "My employer is in Tennessee and I live in Alabama so the work and home rules do not apply, Correct?"  I suggest posting this in a new thread.  this topic is beyond my area of expertise.

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[DavidF2]

Bosso3,

Actually I use a CD desktop version of TurboTax Premier.   I will try using a  copy of TurboTax for estimated taxes.  The estimated tax forms which are available such as Fed "Estimated Tax options" & State "Estimated Wks" are not flexible in adjusting 2022 income and expense assumptions.  I will give your copy option a try. 

The last thread applies to certain states which have work from home "Convivence of employer" tax laws.  Look it up.