Estimated Tax Payments

[etwyrick]

I think I have found a significant error in this year's software.  My estimated taxes for 2018 paid by the due dates are correctly recorded.  The 4 estimated state payments total correctly transferred into my state form, and the 4 estimated federal payments total correctly transferred into my federal form.  HOWEVER, the state estimated tax information gets transferred into the federal form by the State & Local Tax Deduction Worksheet which currently does not pick up the 4th and final 2018 payment due 1/15/19.  I called Turbotax and spoke with their support person and they sought help from their next level, "TA".  I got back an unsatisfactory answer but a workaround to change the 1/15/19 date to 12/31/18 so I could eFile.  If I am correct anyone filing estimated taxes that have a state tax deduction to use on their federal return is going to be screwed big time as they will miss deducting their 4th quarter state estimated tax payment.

[VolvoGirl]

No that's right.  If you made the 4th quarter state estimated payment in January then you can not deduct it on a federal return for 2018.  Only state payments actually made in 2018 are a deduction.  So a January 2019 state payment will go on next year's 2019 federal return as a deduction.  You have to enter the dates you actually made the payments.

Now if you made a 2017 4th quarter state payment a year ago in January 2018 you can also deduct that on your 2018 federal return.  

So again, the federal state and local deductions worksheet should NOT include a Jan 2019 state payment.  You have to remember to enter it into next years 2019 return.  If you wanted it to be a 2018 Deduction you needed to pay it IN 2018.

[VolvoGirl]

That's why I always pay mine by Dec 31.

[SteamTrain]

@etwyrick 

I can also confirm that you are mistaken.

That 4th quarter state payment made in Jan of 2019 cannot be used as a Federal itemized deduction on your 2018 Federal taxes. 

Changing the date to December of 2018 was an improper move on your part.

[VolvoGirl]

We are assuming you made the 4th quarter payment in January.   If you actually made it in December you do need to change the date when you enter it.  You enter the ACTUAL dates you made the payments.  Turbo Tax does it right.

[etwyrick]

Thanks for the prompt replies, it is appreciated.  I failed to mention that I use accrual basis for state tax deductions (since 1985 and once selected you are unable to change back to cash basis).  Turbotax has never had a direct method for doing this and I have always depended on a manual override to make things correct.  This year I was in search for a "proper" method to report without doing an override.  Will change the dates back to 1/15/19 for last estimated payments and simply make the proper entry on Schedule A Line 6 to pick us the accrual,  Unless there is something I am missing.