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sticks54
New Member

Do I really need to pre-pay 2018 taxes because we sold an inheritance that caused us to owe > $1000 in 2017?

We have FMV from certified appraiser 22 years ago (upon inheritance) so am confident in value from that date.  Additional 2017 taxes are owed due to this sale but we normally owe little (occasional getting a refund) every year.  TurboTax is providing quarterly 2018 tax payments even though this is a one-time occurrence.  Do I need to file another IRS form explaining the situation or can I just ignore the quarterly payments?

Thank you.

1 Best answer

Accepted Solutions
DanO
New Member

Do I really need to pre-pay 2018 taxes because we sold an inheritance that caused us to owe > $1000 in 2017?

If this is a one time occurrence then you won't need to make estimated payments, you are okay. The estimated payments are to help keep you from underpaying and getting a penalty.

To determine whether you need to make quarterly estimates, answer these questions:

  1. Do you expect to owe less than $1,000 in taxes for the tax year after subtracting your federal income tax withholding from the total amount of tax you expect to owe this year? If so, you're safe—you don't need to make estimated tax payments.
  2. Do you expect your federal income tax withholding (plus any estimated taxes paid on time) to amount to at least 90 percent of the tax that you will owe for this tax year? If so, then you're in the clear, and you don't need to make estimated tax payments.
  3. Do you expect that your income tax withholding will be at least 100 percent of the tax on your previous year's return? Or, if your adjusted gross income (Form 1040, line 37) on your tax return was over $150,000 ($75,000 if you're married and file separately), do you expect that your income tax withholding will be at least 110 percent of the tax you owed in tax for the previous year? If so, then you're not required to make estimated tax payments.

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1 Reply
DanO
New Member

Do I really need to pre-pay 2018 taxes because we sold an inheritance that caused us to owe > $1000 in 2017?

If this is a one time occurrence then you won't need to make estimated payments, you are okay. The estimated payments are to help keep you from underpaying and getting a penalty.

To determine whether you need to make quarterly estimates, answer these questions:

  1. Do you expect to owe less than $1,000 in taxes for the tax year after subtracting your federal income tax withholding from the total amount of tax you expect to owe this year? If so, you're safe—you don't need to make estimated tax payments.
  2. Do you expect your federal income tax withholding (plus any estimated taxes paid on time) to amount to at least 90 percent of the tax that you will owe for this tax year? If so, then you're in the clear, and you don't need to make estimated tax payments.
  3. Do you expect that your income tax withholding will be at least 100 percent of the tax on your previous year's return? Or, if your adjusted gross income (Form 1040, line 37) on your tax return was over $150,000 ($75,000 if you're married and file separately), do you expect that your income tax withholding will be at least 110 percent of the tax you owed in tax for the previous year? If so, then you're not required to make estimated tax payments.

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