Turbo Tax Premier showed a refund for 2019 but did not create estimated QTR taxes for 2020. So is there an issue with Turbo Tax?
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The TTX program will create the 1040-ES forms only if you owe taxes. Since you're getting a refund there's no need for the program to do that this year.
However, if you want to pay estimated taxes you most certainly can, and you don't need any program to tell you that. You also don't need the 1040-ES either. You can pay your 2021 quarterly estimates on line at www.irs.gov/payments.
Thanks for the feedback. The only way I found out was when the IRS sent me a letter telling me they adjusted my 2020 form 1040 to match past history of estimated payments. I always let Turbo Tax tell me what to do but looks like they missed the boat. I would have at least appreciated a warning based on past history since they did the taxes for several years and have that history.
So the other big question is this amount the IRS is requesting deductible in the future or is the amount just to satisfy the 2020 tax obligation? Thanks 😀
I doubt the IRS adjusted anything to match "past history". If the IRS changed your 2020 tax return, it's because they were aware of something you didn't report on the tax return. Could be income you forgot about, or a deduction you were not entitled to, or any number of things.
I myself am self-employed and I just send the IRS 20% of my gross business income each quarter. Then come tax filing time I'm always within $1000 of whatever my tax liability may be, thus no penalties are assessed. Typically, I always get a refund. But I've had two times I actually owed the IRS. Both times it was less than $500 that I owed. Since the amount was less than $1000 no underpayment penalties were assessed. (provided of course, I pay the full amount due by the payment/filing deadline.)
While one can use the feature in the program to figure and manually generate the 1040-ES for quarterly tax payments, I myself find it a waste of time and effort. I have no way possible of even guessing what my earnings will be each quarter. So a few days before the quarterly filing deadline of each quarter, I look at the gross business income for that quarter and then pay online to the IRS 20% of whatever that amount is.
Hopefully I'm not consuming all your share time. Per the IRS Letter:
Changes to your 2020 form 1040 Amount due $2,268.00
We changed your 2020 form 1040 to match our record of your estimated tax payments, credits applied from another tax year, and/or payments received with an extension to file. As a result, you owe $2,268.00.
This return was for my self-employed son who is structured as a single owner LLC therefore he can use Schedule C for income and expenses. 🙄
Forget about estimates you didn't pay. It's not about that. But your return is showing that you entered some or entered too much withhholding or some payment. Check the payments on 1040 lines 25 and 26 and see if you agree with the amounts.
Turns out form 1040 line 30 Recovery Rebate Credit was the issue so looks like I owe the IRS. Thanks for the help. 😃
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