Estimated taxes

[user17757570881]

I left my sole-proprietorship 20 years ago and I've been paying estimated taxes 4 times a year since then.  I would like to opt out of doing that and just pay my income tax in one lump payment during tax season. Do I have to register somewhere....or just stop the quarterly payments?  I don't want to be penalized in any way. 

 (I am a Turbo-Tax customer)

[VolvoGirl]

The estimated payments are optional to pay.   You can ignore them.  Just be careful if you owe too much when you file your tax return you can pay a penalty.   

[user17757570881]

Thanks VolvoGirl....but what do you mean I may have to pay a penalty if I owe too much?   What's wrong with just paying what I owe?

[VolvoGirl]

The IRS wants you to pay taxes during the year as you earn the income.   

If you do not pay enough tax, you may have to pay a penalty for underpayment of estimated tax. Even if you are getting a refund you can still owe a penalty for not paying in evenly during the year.  Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. It is included in your tax due or reduces your refund.

[user17757570881]

You are confusing me.   All I want to do is stop paying quarterly and just file my taxes in March or April like normal people.   I know I will owe taxes.  Since I've been paying in quarterly i just want to be sure there isn't a penalty for suddenly stopping the estimated payments.  

[BillM223]

VolvoGirl gave you your answer:

Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller.

So it does not matter if you suddenly stopped making estimated tax payments, so long as you owe less at the end of the year than $1,000 or have paid at least 90% of the current year tax or 100% of the previous year's tax.

There is no penalty for stopping paying estimated taxes, but only for underpaying your taxes through the year.

If this still does not make sense, please see Estimated Taxes at the IRS website.

[user17757570881]

Thank you both.  I guess I will continue the Estimated payments because I know I will owe more than $1000...and I hate late fees, penalties, etc.