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musicalnotes
Level 2

I paid all my estimated taxes but the amount I owe for 2020 is still couple thousand. Will we still owe a penalty?

It's February 2021, can I add to my 2020 estimated tax payments to avoid a penalty when I file this Spring?
2 Replies
Mike9241
Level 15

I paid all my estimated taxes but the amount I owe for 2020 is still couple thousand. Will we still owe a penalty?

you may not need to. there are no penalties for underestimation of estimated taxes if any of the following apply:

1) withholding and timely estimated tax payments = 90% of 2020 tax

2) or 100% 2019 tax (110% if your 2019 adjusted gross income was over $150,000) 

if you don't meet any of these exceptions you can pay in more now but you'll still have some underestimation penalty because you are paying after 1/15/2021

 

SteamTrain
Level 15

I paid all my estimated taxes but the amount I owe for 2020 is still couple thousand. Will we still owe a penalty?

If you did pay 2020 quarterly estimated taxes during the last year, you did enter those payment amounts as having been paid, into the software...didn't you?

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
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