While filing for 2019 taxes this year, I applied the overpayment to 2020 taxes.
My question is how do i claim this overpayment to pay the estimated taxes of 2020? The overpayment will most likely cover full federal estimated taxes of the whole 2020 year
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Next year when you file your 2020 tax return you enter the amount of the 2019 tax refund that you applied to the 2020 taxes. You are not required to file estimated taxes for 2020.
For example, on a 2019 tax return the 2018 federal refund applied to the 2019 taxes is entered on Form 1040 Line 22
Next year when you file your 2020 tax return you enter the amount of the 2019 tax refund that you applied to the 2020 taxes. You are not required to file estimated taxes for 2020.
For example, on a 2019 tax return the 2018 federal refund applied to the 2019 taxes is entered on Form 1040 Line 22
Okay. So just to confirm i dont have to do anything since the refund from 2019 applied to 2020 taxes will fully cover for all estimated taxes, i don't have to pay anything for the estimated taxes to claim that overpayment?
I'm self employed and need to pay estimated taxes for 2020 tax year. However there is the overpayment from 2019 which i applied to 2020 taxes.
i want to claim this overpayment to pay all of the estimated taxes of 2020. How do i do that? Or since the overpayment fully pays for the taxes, i just don't have to do anything?
That is correct. You do not need to do anything else until you file your 2020 tax return. That is where you will see the 2019 overpayment being applied to your 2020 tax liability.
The overpayment will not specifically pay your estimated taxes, but the end result is the same thing. You are allowing the IRS to keep your refund from 2019 as a credit toward your 2020 taxes. It is functioning the same was as if you were making quarterly estimated payments throughout the year.
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