I’ve seen this question posted tons of times, but they haven’t answered my question.
So I owed federal taxes for 2023. I made payments directly to the irs monthly in 2024. Where do I enter these payments made in TurboTax? Is this considered an “estimated tax” even though in the literal sense the amount owed is not “estimated” its actual? Not sure I understand this words meaning in the tax world.
Follow up question is does TurboTax automatically draw in what I owe to the irs or is it simply pulling from the data entered last year and ignoring “payments”. Meaning I don’t have to enter anything, it knows I made payments.
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No. You do not enter those payments. You were on a payment plan to pay tax owed. There is nothing to deduct for that or to enter about that.
TurboTax is not using any information regarding your back taxes. TT never knows how, when or even if you paid your tax due from a past year. The amounts you see on your 2024 tax return are based only on your 2024 income and withholding.
The IRS knows that you made the payments. You can check your online account with the IRS to verify that.
https://www.irs.gov/payments/your-online-account
See that’s why I ask, so my follow up question is say for example you owed 5k, you pay 5k of it in the year. So when you fill out TurboTax, it sees you owed 5k so it adds that to this year and puts your return towards in. Say you should be getting a return this year, but because of that 5k TurboTax thinks I owe it says I’m getting back $20. If I submit this, what happens? Do I really only get $20 back when I should be getting 5,020?
You are confused. Paying your 2023 tax due, does not create a refund for 2024 for you. You simply owed $5K for 2023 and paid it in 2024.
TurboTax does not "think" you still owe $5K. TT never knows if you paid your tax due and does not use that for any of the calculations that were done for your 2024 tax return.
You do not enter anything about that on your 2024 tax return.
If your refund is only $20, it is because instead of owing a lot for 2024, you had enough tax withheld in 2024 to get a small refund. The amount of your refund for 2024 has nothing whatsoever to do with the tax you owed last year.
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