Getting a federal refund, why estimated tax?

[Evapnw]

Just completed my 2022 federal and state tax returns and went through to view the printed form before filing. I’m getting a refund for both federal and state, but my preview form shows estimated tax payments of $300 per quarter. What’s up with this?  
Both myself and my husband are employed, there have been no changes in our tax situation, and we’ve gotten a refund for the last 5+ years. Why would we need to pay estimated taxes? Something seems wonky.

thanks for any help or direction you can provide

[fanfare]

If TurboTax supplies you with 1040-ES for next year, it is a warning that you have been under-withholding on your income in 2022

@Evapnw 

[AliciaP1]

You may be reporting income that is not subject to withholding that results in more than $1,000 of tax.  If this income is not ongoing, you do not need to make estimated tax payments in 2023.  If you do expect this income to continue at or above the amount reported for 2022, you should make the estimated tax payments in order to avoid the underpayment penalty on next year's tax return.

Per the IRS:

Estimated tax is the method used to pay tax on income that is not subject to withholding (for example, earnings from self-employment, interest, dividends, rents, alimony, etc.). In addition, if you do not elect voluntary withholding, you should make estimated tax payments on other taxable income, such as unemployment compensation and the taxable part of your social security benefits.

You can see Estimated Taxes for more information.

@Evapnw

[VolvoGirl]

Turbo Tax is very conservative and doesn't want you to owe too much next year. If you are receiving a refund or low tax due and Turbo Tax prepared the vouchers then your tax liability was probably reduced by credits. They might have printed out if you got a one time large income this year like if you took a IRA or 401k distribution. They are optional to pay and do not get sent with your return so the IRS won't be expecting them.

[Critter-3]

• What are federal estimated taxes?
• Can TurboTax calculate next year's federal estimated taxes?

[Evapnw]

@AliciaP1 :Thanks.  This makes some sense, as I do have a 1099-DIV.  BUT:

1. I've had this every year, and never had estimated taxes previously;
2. I withhold additional federal taxes every year to ensure I don't owe;
3. I am due a sizeable refund this year (same as every other year).

It gives me heartburn that TT might set the IRS to expect quarterly pymts.  Any advice or assurance you can give is appreciated. 

[Evapnw]

Thanks @VolvoGirl .

Can you point me to where I can verify that the IRS will not be expecting estimated payments?  This sounds reasonable, but I am super concerned that TT made this "helpful decision" for me, despite the fact that I withhold additional taxes each year to offset it.  I've just never seen it before, despite using TT for the past 3 years (at least).  TIA.

[RDW5]

Go back and review to see if you checked the box that asks if you want to make a payment for estimated taxes for the coming year.

[AliciaP1 · Accepted solution]

The estimated tax payment coupons created with your return are in your copy only.  They do not get sent to the IRS unless you send one in with payment and therefore do not create the expectation of payments.  Since you have not had estimated taxes in previous years, it may be that the current tax law or the dollar amounts just worked out right that TurboTax is expecting you to potentially hit the calculation limits and is trying to help you avoid any penalties.  The site I have provided shows how the underpayment penalty is calculated as well as the interest so you can gauge how much risk there may be for you.

You can see Estimated Taxes for more information.

@Evapnw