estimated taxes

[michelebbowman]

I had to pay estimated taxes in 2021, but in 2022 worked for a group that withheld taxes, same for 2023.  I was penalized for not paying estimated taxes in 2022.  How do I stop being required  to pay estimated taxes.

[DoninGA]

Go to this IRS Tax Topic website for information on the Underpayment Penalty and how to avoid - https://www.irs.gov/taxtopics/tc306

[Critter-3]

The following is the general rule:

You must pay estimated tax for 2022 if both of the following apply.

1. You expect to owe at least $1,000 in tax for 2022 after subtracting your withholding and tax credits.
2. You expect your withholding and tax credits to be less than the smaller of: 
   1. 90% of the tax to be shown on your 2022 tax return, or
   2. 100% of the tax shown on your 2021 tax return. Your 2021 tax return must cover all 12 months.

Note: If your AGI for 2021 was more than $150,000 ($75,000 if your filing status for 2022 is married filing a separate return), substitute 110% for 100% in (2b)

[NCperson]

@michelebbowman although not directly stated, but inferred, you can increase your withholdings to avoid penalties for underpaying the estimates

you can also complet form 2210 (by hand) to see if you are going to subjecft to penalties.  It is a gory form, but it is what is used. the form will be the same for 2023. . 

https://www.irs.gov/pub/irs-pdf/f2210.pdf

[VolvoGirl]

How/where were you penalized?  Was it on your 1040 line 38?  It's not for filing or paying late.  It doesn't have to do with last year's tax return or not paying estimates for this year.  The penalty is an "estimated" amount.    It's a penalty if you owe too much or for not paying in enough withholding during the year or not paying in evenly.  

You might have been able to eliminate it or at least reduce it.  You go to Federal Taxes tab or Personal tab, under Other Tax Situations and select Start by the Underpayment Penalties. You will answer a series of questions that may reduce or eliminate the penalty

[fanfare]

To answer your question,

to eliminate Estimated Tax, your Withholding from W-2(s) must be sufficient to pay your tax.

within $1,000 dollars.

i.e. the amount you owe must be less than $1,000 to avoid penalty.

It is your responsibility to make it happen by submitting a W-4 to your employer(s).

@michelebbowman