Should I make a fourth estimated tax payment?

Forum|Forum|3 years ago
December 9, 2022
2 replies
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Each year I do a Roth Conversion from my traditional IRA and make estimated taxed for the increased income this will add. I have recently added solar electric which will give me a 30% tax credit beginning this year. Will the IRS use my estimated tax payments first or the solar tax credits and refund my estimated payments? The tax credits far exceed my tax liability in 2022 and will take several years to use it all.

TurboTax Online

Best answer by Bsch4477

The solar credits will be applied toward your tax owed and the rest of your tax liability will be settled by applying your estimated payments. Any amount remaining will be refunded.

fanfare

Level 15

You don't make an extraneous or unneeded Estimated Tax payment unless for some reason you plan to apply it to next year's taxes.

Still you must meet the minimum withholding requirements for your taxable income.

@Insagn

Bsch4477

Answer

Level 15

The solar credits will be applied toward your tax owed and the rest of your tax liability will be settled by applying your estimated payments. Any amount remaining will be refunded.