Excessive Quartey Payments

[kiawahmike]

I had excess capital gains in the fourth quarter of 2021.  The result was a very large tax liability an underpayment penalty and excessively large quarterly ES payments in 2022.

Is there a form on Turbo Tax Premier that I missed that would have smoothed my tax liability for 2022 based upon history vs recent performance?

[LenaH · Accepted solution]

Yes. TurboTax usually uses the most recent information (2021) when calculating your 2022 estimated taxes. Generally, taxpayers have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed 

and:

 * Your taxes withheld don't cover at least 90% of your 2021 tax liability, or

 * Your taxes withheld aren't at least 100% of your 2020 tax liability if your AGI is up to $150,000 or 110% if your AGI is more than $150,000. (The amount is $75,000 if you're married filing separately.)

Depending on what your AGI is expected to be, you may be responsible for estimated tax payments for up to 110% of your estimated tax liability. 

TurboTax allows you to estimate your 2022 income and deductions in order to calculate and adjust estimated tax payments, if necessary.

Please follow these steps to calculate and generate new 1040-ES vouchers: 

1. With your tax return open, search for 1040-es (be sure to include the dash) and select the Jump to link.
2. Answer No to the question Do you want to change your W-4 withholdings for 2022?
3. Answer Review Now on the page Review Your Estimates?
4. Answer the questions about items such as your 2022 filing status, income, and deductions.

[kiawahmike]

Thanks