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Level 2

2020 Quarterly Filing NOT Self Employed

I will need to pay quarterly Federal taxes in 2020. My employer already withholds taxes from my pay every two weeks and remits those taxes quarterly. However, I have other forms of income from stock trades and dividends where no incone tax is withheld. 

Does TurboTax offer the ability for me to calculate my estimated quarterly 2020 income taxes, even though I am NOT self employed?

This means some of my taxes are withheld by my employer but taxes on my stock trades and dividends are not withheld. All i see are TurboTax products geared to the self employed for quarterly taxes. But again i am employed with taxes withheld on that income but not withheld on my stock trades and dividends. So i need to know if Turbotax will "know" about my income and tax withholdings from my employer bc it needs to see my total picture. Thanks

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Level 15

2020 Quarterly Filing NOT Self Employed

Yes.  It doesn't have to be for self employment income.  You can prepare the estimates for any income from any version.

 

You can just type W4 in the search box at the top of your return , click on Find. Then Click on Jump To and it will take you to the estimated tax payments section. Say no to changing your W-4 and the next screen will start the estimated taxes section.

 

Or Go to….

Federal Taxes or Personal (Desktop H&B)

Other Tax Situations

Other Tax Forms

Form W-4 and Estimated Taxes - Click the Start or Update button

View solution in original post

17 Replies
Highlighted
Level 15

2020 Quarterly Filing NOT Self Employed

Yes.  It doesn't have to be for self employment income.  You can prepare the estimates for any income from any version.

 

You can just type W4 in the search box at the top of your return , click on Find. Then Click on Jump To and it will take you to the estimated tax payments section. Say no to changing your W-4 and the next screen will start the estimated taxes section.

 

Or Go to….

Federal Taxes or Personal (Desktop H&B)

Other Tax Situations

Other Tax Forms

Form W-4 and Estimated Taxes - Click the Start or Update button

View solution in original post

Highlighted
Level 2

2020 Quarterly Filing NOT Self Employed

Ok i think i follow....but i dont actually want TT to do anything to my W4. How do i let TT know, say in early April 2020, how much i made through my job and how much was withheld during the first quarter? And then at the same time I'd also let TT know how much stock trade and dividend income i made in the 1st quarter too? So that TT would have my total 1st quarter picture of everything, even tho im not changing my w4 tho? Does that sound about right? Thanks again

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Level 15

2020 Quarterly Filing NOT Self Employed

Yes you can go back into your return and fill out the estimated section.  You aren't filling out a W4.  You just search for that to get to the right place.  You say No to W4 and it continues on to the Estimates.  The estimates will be based on your estimated total for the whole year.  They are just estimates.  It will print out the 4 quarterly 1040ES slips.  For the future ones you can adjust them either by going back into your return or just cross out the amount and write a new amount.

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Level 15

2020 Quarterly Filing NOT Self Employed

First (and this is just my opinion - we all have one!) you really don't need to go through all that W-4 crap or bother with sending the IRS a 1040-ES via mail. You can pay your quarterly taxes to the IRS online any time you wish at www.irs.gov/payments. Just make sure you *PRINT* *YOUR* *RECEIPT* when done. On the website, just indicate you're making a 1040-ES quarterly payment and ensure you select the right tax year you're making the payment for.

In the TurboTax program you can manually enter the tax payments you made during the tax year you are filing for, under the Deductions & Credits tab in the "Estimates & Other Taxes Paid" section. So this isn't a big deal really.

Generally, most folks will fall into the 22% tax bracket with a small number in the 24% bracket. So if you send the IRS at least 20% of your "take" each quarter, then come tax filing time you'll be fine.

Now you can use the IRS worksheets or the TTX program if you want. But you'll always come out to between 19% and 23% of your as-of-yet untaxed income, being what you'll send to the IRS. So I myself don't waste my time and effort to "do the math", knowing that 20% minimum will suffice just fine. (It has for 15 years so far)

Finally, if your state also taxes personal income, you'll need to pay your state taxes quarterly too. Not all states offer the online payment option. So you'll have to check the webste for your state's taxation authority to see what your payment options are.

 

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Level 2

2020 Quarterly Filing NOT Self Employed

Thank you again

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Level 2

2020 Quarterly Filing NOT Self Employed

Thanks Carl. If i go straight to the IRS site, how much would i know to pay out of pocket by say April 5th for the 1st quarter if my employer has also withheld income from my 1st quarter paychecks? Bc im really only trying to cover the taxes on my stock trades and dividend income and want the credit for the taxes withheld by my employer. 

Second, my state does have income taxes but i didnt underpay them for 2019. Are you saying that since i have to file federal taxes quarterly now for 2020 that that automatically means i have to file quarterly state taxes too for 2020, even thou i didnt underpay my 2019 state taxes?

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Level 15

2020 Quarterly Filing NOT Self Employed

im really only trying to cover the taxes on my stock trades and dividend income and want the credit for the taxes withheld by my employer.

Your employer is withholding taxes based on what that employer paid you. Your employer could care less about your other sources of income. What your employer withholds is a percentage of each of your paychecks they pay you each payday. That percentage is based on how you filled out the W-4 you provided to that employer.

Now you can change your W-4 any time you wish with your employer. But why deal with it?

If your investments make $40,000 the first quarter, 20% of that is $8,000 and that's what you pay the IRS. Then if the next quarter your investments only make you $10,000 you'll send the IRS $2000 for that quarter.

If the third quarter your lose $15,000 on your investments, you send the IRS nothing. Not a penny. Then if in the fourth quarter you make $10,000 you would still send the IRS nothing. Simple math here.

1st quarter - $40,000              Taxes paid  $8000

2nd quarter- $10000              Taxes paid $2000

3rd quarter - Lost $15,000     Taxes paid  $0

4th quater - $10,000               Taxes paid  $0

Year total $45,000                   Taxes paid $10,000

For the year, 20% of your total would be $9000. But you've paid $10,000. What tax bracket you "actually" fall into will determine how much of it will be refunded.

Understand this: At tax filing time if you owe the IRS, so long as what you owe the IRS is less than $1000 ***OR*** less than 10% of your total tax liability (whichever is *HIGHER*) then no underpayment penalties are assessed.  You'll be fine. Just don't bother with messing with the tax withholdings from your W-2 paycheck. It's a waste of your time and has the potential to leave you in a lurch if tables turn and you need the cash "RIGHT NOW".

 

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Level 2

2020 Quarterly Filing NOT Self Employed

Thanks again. Let me clean my question up. When i calculate my quarterly estimated tax due using the method you suggest, do i include the income and witholdings from my employer ("day job") paycheck in these calculations, or do i essentially exclude my paycheck income and withholdings from my quartely tax calculations?...and only calculate my quarterly estimated income and taxes based on the income i think i will earn outside from my paycheck where no taxes are withheld (e.g. dividends and capital stock gains)?

I do not want to double pay the taxes from my paycheck income, since taxes on my paycheck income are being withheld from my paycheck by my employer already anyways.

 

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Level 15

2020 Quarterly Filing NOT Self Employed

If you end up paying too much quarterly estimated taxes you will get a refund on your tax return.  It's all in one pot.

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Level 2

2020 Quarterly Filing NOT Self Employed

When i do my estimated quarterly tax calculations, do i include my paycheck income and taxes withheld from my paycheck in those calculations?

 

Or when i do my estimated quarterly tax calculations, do i ignore my paycheck income and withholdings from my estimated quarterly calculations? 

 

I dont want to pay estimated quarterly taxes on my paycheck income where the taxes are withheld already.

 

 

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Level 15

2020 Quarterly Filing NOT Self Employed

Whatever tax you owed last year over and above tax withheld, divide it by four and make an estimated tax payment.

OR

Do a TRIAL tax return for 2020 using 2019 tax software, entering your expected stock gains and dividends to project your tax. Of course, include all other income for best results.

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Level 2

2020 Quarterly Filing NOT Self Employed

Ok so fanfare for my quarterly estimated figures i calculate, i can ignore or exempt the income and withholdings from my paycheck (presuming my w4 withholdings are perfect) right?

 

Then i only calculate my quarterly estimated taxes on my expected dividends and capital gains on stocks i anticipate earning in 2020, bc nothing is withheld for that income. Is that correct?

 

I have no other income besides my paycheck  and dividends and capital gains on stocks.

Level 15

2020 Quarterly Filing NOT Self Employed

If withholding and estimates are at least the amount of tax you owed last year, that is sufficient to avoid penalties. it doesn't matter how much more you make.

Paying larger estimates is then only needed if you want a smaller bill on April 15th. 

 

"taxes on my expected dividends and capital gains on stocks" -- that's going to be impacted by your total income.

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Level 2

2020 Quarterly Filing NOT Self Employed

Ok so if i just withhold enough solely from my paychecks  in 2020 to equal at least my 2019 tax liability, then am i even required to file quarterly?