Estimated taxes

Forum|Forum|2 years ago
December 13, 2023
2 replies
23 views

I got a federal tax refund last year. This year, due to the midyear sale of a vacation property and a late year Roth IRA conversion, I will owe taxes. But because last year's tax liability was less than zero, do I need to make estimated tax payments this year?

Anonymous_

Level 15

See https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes

Milburn StoneAuthor

Level 2

Thank you. I suppose that the rules are straightforward enough. As long as I have made estimated payments equal to the lesser of at least 90% of the tax owed for the current year (I have not), or 100% of the tax shown on the return for the prior year (which I suppose I have, because last year I got a refund), then I am in compliance. I am simply uncomfortable with making no estimated tax payments this year simply because I got a refund last year, when this year's tax liability will be quite high because of two non-recurring events.