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Level 2

Question

Quarterly estimated payments

Forum|Forum|4 years ago
July 27, 2022
1 reply
21 views

I made an estimated payment to IRS and it was returned. Will I have to pay a penalty later?

Level 7

Making estimated payments are a great way to not owe so much when filing your taxes and to avoid the underpayment penalties.

There are two ways to avoid the underpayment penalty;

You can avoid the penalty if your total timely estimated payments and withholdings are greater than or equal to the lesser of:

90% of the total tax after credits for the current year, or
100% of the total tax after credits in the prior year

Of course it's hard to estimate 90% of the current year tax, so best to go with second option.

https://turbotax.intuit.com/tax-tips/irs-tax-forms/what-is-form-2210/L2z0haVWb

I hope you find this helpful!

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