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J000059
Level 2

Tax Deadline and using refund for Estimated Tax payment question

Single member LLC disregarded entity schedule C filer.

Tax deadline extended to May 17th.

First quarter estimated tax payment due April 15th.

Due to significant drop in 2020 income, I have an estimated refund >> then first quarter safe harbor estimated tax payment.

If I file personal taxes on May 17th and carry over the refund to apply to 2021 estimated tax payment, will it be considered late ? (even though it was technically collected/paid in Sept. 2020 and Jan 2021 estimated tax overpayments).

8 Replies
Mike9241
Level 6

Tax Deadline and using refund for Estimated Tax payment question

I have seen no guidance on this issue.  consider that if you requested a refund, rather than applying it, as of now you would have to make an estimated tax payment on or before 415/2021.  so why wait to file until 5/17. of course the IRS could revise its position and make the first estimate due 5/17 which professional organizations have requested. 

J000059
Level 2

Tax Deadline and using refund for Estimated Tax payment question

Thanks Mike for the reply.  I couldn't find anything specific addressing this situation either.  

ColeenD3
Employee Tax Expert

Tax Deadline and using refund for Estimated Tax payment question

It is always better to err on the side of paying in too much early on. 

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libbyurner
New Member

Tax Deadline and using refund for Estimated Tax payment question

Related question - if I file by April 15 (the due date of the Q1 estimated payment) and apply my refund to my Q1 estimated payment, is that considered to be "paid on time"?

It's seeming crazy to need to mail in a couple thousand in estimated payment, knowing I've got more than that coming back with my refund. But the extended deadline of May 17 suggests that IRS may not *APPLY* that payment-from-refund even if the return is filed by April 15.

 

ColeenD3
Employee Tax Expert

Tax Deadline and using refund for Estimated Tax payment question

Yes.

 

You can apply some or all of your 2020 tax refund to next year's taxes. When you come back to do your taxes in 2022, the amount you applied will show up as a credit.

Tip: If you pay quarterly estimated taxes, apply a portion your refund to next year's first-quarter estimated tax payment, which is due April 15. This can help prevent underpayment penalties on next year's return.

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libbyurner
New Member

Tax Deadline and using refund for Estimated Tax payment question

Let me better clarify my question.

My Estimated Tax quarterly payment for Q1 is still due tomorrow, 4/15.

I have a large refund from my 2020 taxes, which aren't yet filed.

In order to apply (part of) my 2020 refund to my Q1 estimated payment, do I have to file my 2020 return by 4/15 (when the Q1 Estimated payment is due)?  

Or can I just file my taxes before the new return due date (5/17) and still have that quarterly payment be considered on time?  IRS has actually had the $$ for months already - the refund mostly is the result of overpaying my estimated payments in September and January. 

 

J000059
Level 2

Tax Deadline and using refund for Estimated Tax payment question

Libbyurner,

Your situation is similar to mine.  FWIW, I snail mailed my guestimated 1st Quarter taxes yesterday (used last year's 2019 based safe harbor amount since my actual income was down in 2020) and will expect to get a refund 2x that later this month when I have time to complete my taxes.  Seems goofy, but I didn't find a direct answer to the timing question, so errored on the safe side.

AmyC
Employee Tax Expert

Tax Deadline and using refund for Estimated Tax payment question

@libbyurner Unfortunately, the first quarter due date did not change which means any payments would need to be applied /mailed/ paid by today. This would mean filing your return today or making a payment. Your return refund could be applied to second quarter if filing after today.

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