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Level 2
posted Jan 8, 2021 11:39:04 AM

Currently TurboTax estimates I owe less than $1000. Does that mean I don't need to make an etimated payment by 1/15 or are more calculations needed?

I don't have 1099s yet but I'm pretty sure my data is correct.

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1 Best answer
Alumni
Jan 8, 2021 11:54:19 AM

You may not need to pay more.

 

The IRS knows that people who aren't working a traditional W-2 job might have irregular income. So they offer a little leeway and won't punish you if you're a little short.

The estimated safe harbor rule has three parts:

  • If you expect to owe less than $1,000 after subtracting your withholding, you're safe.
  • If you pay 100% of your tax liability for the previous year via estimated quarterly tax payments, you're safe. If your adjusted gross income for the year is over $150,000 then it's 110%.
  • If you pay within 90% of your actual liability for the current year, you're safe.

1 Replies
Alumni
Jan 8, 2021 11:54:19 AM

You may not need to pay more.

 

The IRS knows that people who aren't working a traditional W-2 job might have irregular income. So they offer a little leeway and won't punish you if you're a little short.

The estimated safe harbor rule has three parts:

  • If you expect to owe less than $1,000 after subtracting your withholding, you're safe.
  • If you pay 100% of your tax liability for the previous year via estimated quarterly tax payments, you're safe. If your adjusted gross income for the year is over $150,000 then it's 110%.
  • If you pay within 90% of your actual liability for the current year, you're safe.