Solved: Do I need to set up vouchers for federal estimated taxes as suggested? What is penalty next year if we fail to pay estimated taxes?
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Do I need to set up vouchers for federal estimated taxes as suggested? What is penalty next year if we fail to pay estimated taxes?

 
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Do I need to set up vouchers for federal estimated taxes as suggested? What is penalty next year if we fail to pay estimated taxes?

There are 3 ways you can avoid the penalty:

1. Pay 100% of 2018's tax liability

2. Pay 90% of 2019's tax liability.

3. Owe less than $1,000 total

If you owe the penalty, it is 0.5% of tax owed for each month late. This penalty is not that severe, dollar-wise, unless you grossly underpay.

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New Member

Do I need to set up vouchers for federal estimated taxes as suggested? What is penalty next year if we fail to pay estimated taxes?

There are 3 ways you can avoid the penalty:

1. Pay 100% of 2018's tax liability

2. Pay 90% of 2019's tax liability.

3. Owe less than $1,000 total

If you owe the penalty, it is 0.5% of tax owed for each month late. This penalty is not that severe, dollar-wise, unless you grossly underpay.

View solution in original post

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Do I need to set up vouchers for federal estimated taxes as suggested? What is penalty next year if we fail to pay estimated taxes?

How to avoid estimated tax penalties?

In general, you must pay estimated tax when:

  • you expect to owe at least $1,000 in tax after your withholding and refundable credits, and.
  • you expect your withholding and refundable credits to be less than the smaller of (1) 90% of the tax to be shown your tax return, or (2) 100% of the tax shown on the previous year's tax return.
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Do I need to set up vouchers for federal estimated taxes as suggested? What is penalty next year if we fail to pay estimated taxes?

How much is the failure to pay penalty?
The failure-to-file penalty is .05% of your balance due for every month (or part of a month) in which your taxes go unpaid. The amount you owe for this penalty will be reduced by the amount you owe for the failure-to-pay penalty. The maximum amount of this penalty is 25% of your unpaid taxes.
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New Member

Do I need to set up vouchers for federal estimated taxes as suggested? What is penalty next year if we fail to pay estimated taxes?

@MickeyMath That's failure to file penalty. Failure to pay is 0.5% not 5%
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Do I need to set up vouchers for federal estimated taxes as suggested? What is penalty next year if we fail to pay estimated taxes?

Thank you TuboTax Ashby.
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