Should the 2021 1040-ES Payment Vouchers that printed out with my tax return, be paid each quarter even though taxes are still being withheld from our paychecks?

Paying the quarterly estimate tax vouchers is your decision.  If you do not you may end up paying penalties and interest.

 

An alternative is to prepare a W-4 for your employer, and if necessary increase your withholding.

 

TurboTax provides a tool to prepare a W-4:

1. Start at Other Tax Situations
2. Scroll down and select Other Tax Forms
3. Select Form W-4 and Estimated Taxes

 

The underpayment penalty may apply if :

• The amount of tax you paid during the tax year is less than 90% of the tax that you owed for the current year. 
  • Example:  in 2020 you had $8,500 withheld in taxes.  Your 2020 tax return shows that you owe $10,000.  That is less than 90% and there will be a penalty.
• The amount you paid during the tax year didn’t at least equal 100% of your taxes owed the prior year. 
  • Example:  Your 2019 tax return showed that you had $9,000 as a total tax obligation.  You paid $9,001 in withholdings in 2020.  Your 2020 tax bill comes in at $20,000.  There is no penalty because you paid 100% of the 2019 tax.
• The IRS also says you can probably avoid the penalty if the amount you owe is less than $1,000, after subtracting withholdings and refundable credits.

The interest rate is determined quarterly and is the federal short-term rate plus 3 percent. Interest compounds daily.

 

No, you shouldn't need those if you are a regular employee and receive a W2 unless you have regular income that is not reported on a W2 form (Ex. 1099-MISC from self-employment or other self-employment income). If you need to adjust your withholding for taxes, you can do that by updating your W4 form with your employer to withhold additional taxes or even adjust them for less withholding if you have room to adjust withholding and keep more of your pay from paycheck to paycheck without owing taxes at tax time.

 

Unless your tax situation is going to change for 2021, you most likely do not need to adjust anything as long as you have regularly been receiving a refund at tax time. You can always use a tool like the IRS withholding calculator to help make sure that your withholding from your employer(s) will cover your tax liability at tax time.

 

https://www.irs.gov/payments/tax-withholding

 

TurboTax also has several tax tools to help you with tax calculations, including withholding:

 

https://turbotax.intuit.com/tax-tools/

 

They are optional to pay. Turbo Tax is very conservative and doesn't want you to owe too much next year. They might have printed out if you got a one time large income this year. Like if you took a IRA or 401K distribution. You can ignore them. You might want to adjust your withholding at work so you won't owe too much next year.

 

If you are receiving a refund or low tax due and TurboTax prepared the vouchers then your tax liability was probably reduced by credits. Your Tax Liability is the amount on 1040 line 16. It is the tax you owe on your income. But you might qualify for credits that can reduce your tax due or even give you a refund. Credits are on Schedule 3.