I suspect that I need to pay estimated Taxes until January 2023. Can Turbotax help me do this before preparing my 2023 tax return?

[kleopatrick]

I recently switched my income source from a regular salary (with tax withholdings) to a fellowship that is paid by a private foundation that does not withhold any taxes. I therefore suspect that I need to pay estimated taxes before the deadline in January 2023. Can Turbotax help me prepare the necessary documents?

[VolvoGirl]

Do you mean Jan 2024?  You must make quarterly estimated tax payments for the current tax year if both of the following apply:

- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.

- 2. You expect your withholding and credits to be less than the smaller of:

    90% of the tax to be shown on your current year’s tax return, or

  100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months).

To just estimate the remaining quarters put in that you paid $1 for the missed quarters so it will only calculate the remaining quarters.

The 1040ES quarterly estimates are due April 18  June 15, Sept 15 and Jan 16, 2024.  Your state will also have their own estimate forms.

Here are the blank Estimates and instructions (the actual 1040ES forms are at the very bottom so scroll way down)

http://www.irs.gov/pub/irs-pdf/f1040es.pdf

You can pay directly on the IRS website https://www.irs.gov/payments

Be sure to pick the right kind of payment and year.....2023 Estimate

[kleopatrick]

Yes, I meant the deadline is Jan 16, 2024, not 2023. Sorry for the mistake.

Thank you for your answer but I understand already that I must make quarterly estimated tax payments in my situation. That was not my question. I have also already looked in to form 1040ES and while I could try to fill it out myself, it seems quite complex. That is why I would like to know: Can the Turbotax software help me prepare and fill out the necessary forms? Similar to how the forms for a regular tax return are filled out by Turbotax.

[VolvoGirl]

Yes but you need to use the 2022 program to prepare 2023 estimates.  If you used Online for 2022 you would need to switch to the Desktop program which would be a hassle just to figure 1 estimate.    I would probably send in like 20% to cover it.  Just write in an amount on the 4th qtr 1040ES slip or pay directly online.  

[VolvoGirl]

Will you be getting a 1099NEC or 1099Misc for this income?  If it is considered independent contractor income that is self employment.  And you pay 15.3% SE tax in addition to regular income tax on it.  

[kleopatrick]

Thank you, that is the information I was looking for! 

Are you saying that I am allowed to just make a rough and conservative estimate (i.e.  20%)  and pay that online? I would like to do that ,even if that means that my estimate is too high and I get a larger return later. So, to be clear: you are saying that it is ok to skip the precise calculation in the 1040ES worksheet and just pay a certain amount that I believe to cover my taxes?

PS: I do not think I will receive a 1099NEC or 1099Misc.

[VolvoGirl]

Yes of course.  It is an "Estimated" amount.  And they are optional to pay.  But if you end up owing too much you may have an underpayment penalty.  

[kleopatrick]

Great. Thank you for your answer!

One last follow-up question: If I pay the estimated taxes online, do I also need to submit an additional form such as the 1040ES with the payment? Or is online payment sufficient as proof and record of  the estimated taxes that I payed?  In other words, how will I proof in my 2023 tax return that I have already paid estimated taxes? 

[DoninGA]

@kleopatrick If you pay the 2023 estimated taxes using the IRS payment website there is no need for you to paper file the Form 1040-ES.  When you use the IRS payment website you will get a confirmation number which you can use to verify the payment if ever necessary.