Estimated Tax payments

[Dinomag]

Hi,

I completed my Mother in Law taxes and she owes over $5000. TurboTax also said we should pay estimated taxes for next year. The reason why she owes $5000 is because she cashed in savings bonds and had interest of over $31,000. That's not going to be the norm every year going forward. Any suggestions as to how we should proceed? We don't want to pay estimated taxes if its not necessary.

Thanks

[bluedeb]

You're not required to make estimated tax payments; Turbotax is  just suggesting it based on the info in your return. If you feel they're not needed or your income will be lower for next year's taxes, you can shred them.  

The Estimated payments from TurboTax are not sent to the IRS.

[Dinomag]

If I decide to cash in my other bonds that will again bring me over $31,000 for interest. With that said do you advise I just pay the estimated taxes suggested by TurboTax? I don't want to risk getting penalized. Your suggestions would be appreciated.

Thanks

[SForrestLO]

You can speak with an expert for assistance with your issue. 

What is TurboTax Live?
https://ttlc.intuit.com/community/choosing-a-product/help/what-is-turbotax-live/00/27191

[LadyGNR]

If you are positive that she will not owe any taxes next year, you can ignore the Estimated Tax Payments for 2022.  But make sure she pays what she owes for 2021 by April 18, 2022.  That's the due date for balances due for 2021 Tax Returns.

[bluedeb]

@Dinomag If you owe expect to owe tax of $1,000 or more when your 2022 return is filed in 2023, then you should pay estimated taxes. 

You can use the TurboTax Calculator to get an estimate of what your 2022 return will be (filed in 2023), it may still have 2021 information but it will give you an idea of what your 2020 tax return would look like.

https://turbotax.intuit.com/tax-tools/calculators/taxcaster/

From the IRS:

Generally, you must make estimated tax payments for the current tax year if both of the following apply:

• You expect to owe at least $1,000 in tax for the current tax year after subtracting your withholding and refundable credits.
• You expect your withholding and refundable credits to be less than the smaller of:
  • 90% of the tax to be shown on your current year’s tax return, or
  • 100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)

There are special rules for:

• Farmers and fishermen
• Certain household employers
• Certain higher income taxpayers
• Nonresident aliens