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scatti
New Member

Estimated balance due for 2023?

 
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3 Replies
AliciaP1
Expert Alumni

Estimated balance due for 2023?

Can you clarify your question?  Are you asking about estimated payments for 2023?

 

@scatti

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scatti
New Member

Estimated balance due for 2023?

When I finished my taxes, a section appeared that quoted Estimated balance due for 2023. I am getting a refund this year.... the estimated balance due is a couple hundred more than my refund is this year.  Nothing is really changing or has changed in the last couple years for me.

Is this a glitch? Should I be worried??

AliciaP1
Expert Alumni

Estimated balance due for 2023?

No, you may be reporting income that is not subject to withholding that results in more than $1,000 of tax.  If this income is not ongoing, you do not need to make estimated tax payments in 2023.  If you do expect this income to continue at or above the amount reported for 2022, you should make the estimated tax payments in order to avoid the underpayment penalty on next year's tax return.  You could also have a tax amount due of more than $1,000 before refundable credits are applied.  Again, if you expect your income to be the same or higher, or if any of your credits may be lower for 2023, you want to consider making the estimated payments suggested.

 

The estimated tax payment coupons created with your return are in your copy only.  They do not get sent to the IRS unless you send one in with payment and therefore do not create the expectation of payments.  Since it sounds like you have not had estimated taxes in previous years, it may be that the current tax law or the dollar amounts just worked out right that TurboTax is expecting you to potentially hit the calculation limits and is trying to help you avoid any penalties.  The site I have provided shows how the underpayment penalty is calculated as well as the interest so you can gauge how much risk there may be for you.

 

Per the IRS:

Estimated tax is the method used to pay tax on income that is not subject to withholding (for example, earnings from self-employment, interest, dividends, rents, alimony, etc.). In addition, if you do not elect voluntary withholding, you should make estimated tax payments on other taxable income, such as unemployment compensation and the taxable part of your social security benefits.

 

You can see Estimated Taxes for more information.

 

@scatti

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