Howe to calculate correct estimated taxes

[normdd]

I am working in TT Personal and using the ES & W4 Wks to generate estimated tax vouchers.  TT calculated a reasonable number for Balance of payments of about $26k.  But when it calculated the Estimated taxes at 110% of my 2023 taxes out comes up with a number of $6k due and total payments of $7k. This is obviously wrong.  Is it pulling my withholding from 1099Rs and assuming they will be the same in 2024?  How do I get the right 1040ES vouchers with the right numbers?

[ee-ea]

To avoid under payment penalties on the 2024 tax return.

Total Tax is line 24 of the 2023 return.

On March 30

Multiply Total Tax by 25% or 27.5% *[ * if line 11 of the 2023 return is over $150K or 75K if filing MFS]

Subtract cumulative withholding. Difference is the amount to pay as first quarter estimate by April 15.

On May 31

Multiply Total Tax by 50% or 55% *

Subtract cumulative withholding. Difference is the amount to pay as second quarter estimate by June 15.

On August 31

Multiply Total Tax by 75% or 82.5% *

Subtract cumulative withholding. Difference is the amount to pay as third quarter estimate by September 15.

On December 31

Multiply Total Tax by 100% or 110% *

Subtract cumulative withholding. Difference is the amount to pay as fourth quarter estimate by January 15, 2025. File and pay by January 31 to avoid paying the last quarterly.

[JohnB5677]

Please clarify your question.

• Let's start with what software are you using.
  • Online
  • Desktop/CD
• Yes, if you had withholdings from your 1099-Rs they will be considered as paid in the estimates.
• What was the tax that you owed in 2023?
• ES forms usually have equal payments.  Do yours?
• Just as a clarification, your W-4 is for your employer to adjust your withholdings from wages.

Please contact us again and provide some additional details.

[normdd]

Thanks for the prompt response.  I am using TT Desktop for Mac.  The 1099R withholdings from 2023 are not appropriate for 2024 since now have a RMD and the numbers will be vastly different. Thus, I need to change these assumptions but cannot figure out how.   We are both retired and collect Medicare.  TT does correctly calculate equal Estimated payments, but the amount due needs to be adjusted for Medicare wages and 2024 1099Rs.

I think the best bet is for me to take the estimated Taxes due for 2024, subtracted estimated tax payments for Medicare (85%) and subtract 1099R tax withholding and spread out the balance due and make estimated payments on that figure.  It is taking way too much time to finesse TT to get the right vouchers.

[JohnB5677]

You may have the right idea.

Take a look at your 2023 tax return.

• For Desktop Look in FORMs.
• If you are Online you can see it at:

1. On the menu bar on the left that shows.
2. Select Tax Tools
3. On the drop-down select Tools
4. On the popup menu
5. Select View Tax Summary
6. On the left sidebar
7. Select Preview my 1040.
8. Schedules 1,2&3 are included if you scroll down past your 1040.
9. To return to the entry screens press Back on the sidebar.

Line 24 is Total Tax.

Safe Harbor is 110% of 2023 tax due.

Subtract what you expect to have withheld.

• From your statement it sounds like only what you paid in withholdings from Social Security (Medicare).
• It didn't sound like you were going to have anything held on your retirement.

Divide this number by 4.

Please contact us again if you have any questions and provide some additional details.

[Mike9241 · Accepted solution]

if your withholding in 2024 will be the same as 2023 the vouchers are correct. safe harbor is 110% of 2023 tax less actual withholding for 2024.  Apparently, Turbotax has no place to enter expected withholding for 2024 

if you want to use a number different from 2023.

you could print out the vouchers and manually change them to whatever number you like. the only effective way to get the vouchers preprinted with the withholding you want to use is to change the withholding on the 2023 forms.   this will produce vouchers with the amount you want. then print them out. no need to actually use then since in my opinion it's much better to arrange payments using IRS online payment system

anyway once dome be sure that the withholding on the 2023 form is correct.