Help with quarterly payments

[jonathan_melin]

I don't remember signing up for quarterly payments. My federal and state taxes have already been accepted and I'm unsure if my upcoming quarterly payments are for taxes currently owed (2020) or for the upcoming year (2021). Thanks for any help!

[gloriah5200]

If you are referring to 1040-ES (guarterly payment) estimated payment vouchers printing with your return, then those are estimated payment vouchers for tax year 2021.

When you have an underpayment penalty on your return, TurboTax automatically completes those vouchers so you can pay them and avoid an underpayment penalty next year, if the income is reported corrected on the estimated payment worksheet.

If you increase your withholdings for 2021 or have less income, and you no longer need to use the payment vouchers, just ignore them.

[VolvoGirl]

The 1040ES are estimates for next year. The 1040ES quarterly estimated tax payments DO NOT get sent to the IRS or state with your return. They are optional to pay. Turbo Tax is very conservative and doesn't want you to owe too much next year. They might have printed out if you got a one time large income this year. Like if you took a IRA or 401K distribution. You can ignore them. You might want to adjust your withholding at work so you won't owe too much next year.

Your tax due is a Single 1040 V voucher unless you entered your bank account for the IRS to pull it out.

[jonathan_melin]

Great and thanks so much for the quick reply. You're correct, I did have to pay a small underpayment penalty.

So if I'm understanding correctly, those 1040-ES payments are basically optional, to help avoid the underpayment penalty but if I'm not concerned with the penalty I can, as you say, just ignore the quarterly payments?

Thanks again! 

[jonathan_melin]

Gotcha, that makes sense and thanks so much for the quick reply. I'll definitely adjust withholdings to avoid this next year. Thanks again to both responders, love this community!