Repaying a missed quarterly estimated payment.

[maxrabbott]

I failed to make a quarterly estimated payment in January 2017 for consulting fees received and reported on a 1099-MISC in Q4 2016. My 1040 prepared by TurboTax for 2016 says on line 79 that I am making paying a penalty for estimated taxes. My question is does this payment listed on line 79 settle the issue with the IRS and bring me up to date for estimated payments? Or do I need to file a  new 1040-ES to make an underpayment penalty for failure to submit a quarterly estimated payment in Q4 2016?

[PatriciaV]

When you file your 2016 return and pay any tax due (including penalties), you have met your obligation for 2016. The penalty is the only cost of failing to pay estimated taxes on time.

Estimated tax payments are used in place of withholding on wages. In the same way withholding is credited against your tax liability for the year, estimated taxes pay your taxes in advance. Unfortunately, the IRS requires the tax to be paid in the same quarter as you receive income. This is why there is a penalty for failing to pay estimated taxes on time. Any taxes you don't pay in advance are due when you file your return. Then you start over for this year. (Your first estimated tax payment for 2017 is due April 18, 2017).