Need help on estimated taxes

[tgoodhue225]

Hi, I filed my 2021 taxes back in February like I do every year with no issues. I have never needed estimated taxes before.

Back at the end of April I was laid off from my job and given a 7-month severance payment.  So, for the first 5 months and my 7-month severance I had taxes taken out on W2s.

I took a 1099 contract job for July and August.  September, I started a new regular W2 job.  My wife and I file jointly, and she works most of the year on a W2.

Do I need to file estimated taxes for my untaxed wages for July and August?  Also, how the heck do you do it if I already filed my 2021 taxes with Turbotax?  I can't quite figure it all out.  Help.  Thank you.

[tagteam · Accepted solution]

You will not be penalized for underpayment of estimated tax if:

1) your timely estimated tax payments equal or exceed 90% of your 2022 tax or

2) your timely estimated tax payments equal or exceed 100% of your 2021 tax (110% if your 2021 adjusted gross income was more than $150K) or

3) your balance due after subtracting taxes withheld from 90% of your 2022 tax is less than $1,000 or

4) your total taxes are less than $1,000.

If you need to make estimated payments, you can do at the IRS web site at the link below.

https://www.irs.gov/payments

If you used a desktop version of TurboTax to file your 2021 tax return, you can use the "What If" feature.

See https://ttlc.intuit.com/community/taxes/discussion/how-do-i-get-the-what-if-worksheet/00/163592

[fanfare]

Besides income tax, you also will pay an SE tax of 15% on the contract job,

If you want to pay those taxes now, make an Estimated Tax payment.

@tgoodhue225 

[tgoodhue225]

Thanks for the info tagteam.

So, I found the What-If worksheet in Turbotax.  I'm guessing I just fill this out with my current info from this year and it will tell me if I owe and how much?  Is that the idea?

[Critter-3]

Correct... it will estimate how much to pay in estimates.

[tgoodhue225]

Thanks everyone, really great information.

Edit - I ended up using that What-If worksheet.  I had to make a few projections of course, but it was pretty easy since it already had everything from 2021 in there.  I just made a manual adjustment to correct for the 2022 updated withholding info.  Thanks.