Hello, Don!
One of the purposes of making estimated tax payments through the year is to avoid the Underpayment of Estimated Tax (UET) penalty. Those four equal, quarterly payments achieve this goal as long as they pay at least 100% of the tax due on your prior return (2022)or 90% of the tax calculated on the current year return (2023). IF your quarterly payments did that, you can choose to pay an additional amount in fourth quarter OR to pay any balance due on the return. So long as the balance is paid on or before the April 2024 filing deadline, you wouldn't incur any late payment penalties.
That said, I encourage that if you choose to prepay in fourth quarter that you make two (2) separate payments: first, one to be the fourth equal payment to meet IRS criteria then the second for the estimated tax due on the additional income.
I hope this information answers your question. If you found it helpful, please say "Thanks" by clicking the thumb icon below. If you found it to be the best answer, please click on "Mark as Best Answer".
Elizabeth W., EA
