Re: Am I required to make estimated tax payments f...
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Am I required to make estimated tax payments for 2019 if my 2018 total tax due was $33k and my tax withholding by my employer for 2019 was $38k?

 
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Am I required to make estimated tax payments for 2019 if my 2018 total tax due was $33k and my tax withholding by my employer for 2019 was $38k?

It depends. The requirement to make an estimated payment is based on your expected tax bill, not your withholding.

 

If the tax due on your 2019 return is less than $1,000 more than your 2019 withholding, you are not required to make an estimated payment. 

 

However, if you expect to owe more than an additional $1,000 to the IRS for 2019, you are required to make an estimated payment.

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Anonymous
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Am I required to make estimated tax payments for 2019 if my 2018 total tax due was $33k and my tax withholding by my employer for 2019 was $38k?

kind of late.  estimated taxes were due 4/15/19, 6/15/19, 9/15/19.   the next one is due 1/15/2020.  in theory 1/4 of your total estimated tax was supposed to be paid each quarter to avoid penalty.  however there are safe harbors where you wouldn't need to pay estimated taxes even though at tax time you could owe 10's of thousands of $ ,  the rule to avoid penalty in 2019 is for your withholding and timely estimated tax payments to be 100% of your 2018 tax.  (110% of your 2018 tax if your 2018 adjusted gross income is $150,000 or more).

 

if you are subject to penalties,  the annualized installment method for calculating penalties might help.   this is best for situations when your income is earned unevenly throughout the year and there's a huge bump later in the year.     it will nor help if more of your income was earned in the early part of the year.

 

 

for 2020, if you expect around the same amount of income as 2019, your choices are either to increase withholding or pay estimated taxes.     estimated taxes are better because it allows you to hold on to your money longer.   however, some taxpayers spend every nickle in their pocket.  if you are one of these then withholding would be the way to go.  

 

 

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