Estimated Tax Payments with Refund Applied to Next Year's Taxes

[emmel650]

My husband and I retired in 2022 and had a substantial tax refund which we applied to our 2023 estimated taxes.  I am confused about when and how much I should pay for estimated taxes for next year.  We will have some taxes withheld from Social Security and a pension, so the remaining estimated taxes due is not very large.  The 2022 refund was larger than 1/2 of our remaining estimated taxes due for 2023, so it covers the first 2 quarters of estimated taxes plus part of the third quarter's taxes.   Does that mean I can skip the first 2 quarter's payments and start paying in the third quarter, or should I subtract the amount of the refund from the total estimated taxes owed, and pay 1/4 of that amount each quarter so that the 4 payments are equal?  I am concerned that the IRS will see the different payment amounts for the different quarters and think I am underpaying for the first 2 quarters.

[PattiF · Accepted solution]

Yes, you can skip the first two payments since the refund applied to the tax year 2023 will cover that portion of the year. Just make quarterly estimated payments for the third and fourth quarters.

The IRS will see that your refund was applied to the next year and know that you are not underpaying for the first half of the year.