Turn off Estimated Tax Payment Vouchers

[Halz]

Received a notice from Colo Dept, of Revenue today stating have penalty because payment(s) of estimated tax were missed or were not made.

I ds see TT printed out  four (4)  quarterly vouchers  again for 2025, like TT did for 2024. I ignored them as I pay what I  owe when I file my tax return ( or some years get a refund) .  Evidently it something TT is filing on my  behalf?

How do I rescind- TURN IT OFF

Please  advise

[VolvoGirl · Accepted solution]

The quarterly estimated payment slips are optional to pay.   The 1040ES or state  quarterly estimated tax payments DO NOT get sent to the IRS or state with your return. So they won't be expecting them.  The penalty is not based on them.   Except that you probably should have sent some in.   

The penalty is an "estimated" amount.    It's a penalty if you owe too much or for not paying in enough withholding during the year or not paying in evenly.  Even if you are getting a refund you can still owe a penalty.  It's very common and normal and expected for the IRS or state to bill you for more or send you a refund.

You might be able to eliminate it or at least reduce it.  You can go to Federal Taxes tab or Personal tab, under Other Tax Situations and select Start by the Underpayment Penalties. You will answer a series of questions that may reduce or eliminate the penalty. Or you can elect to have the IRS figure the penalty for you.  It's form 2210.

It's under

Federal or Personal (for Home & Business Desktop)

Other Tax Situations

Additional Tax Payments

Underpayment Penalties - Click the Start or update button

[baldietax]

Sounds like you need to be paying ES rather than ignoring TT, for both Fed and State.  If you got a notice from CO presumably you will get one from Fed also.

You need to pay thru the year via withholding or timely (usually quarterly) estimated tax, the smaller of 100% of your 2024 tax (110% if AGI > 150k) or 90% of your 2025 tax - this is your 'safe harbor' amount.  Check CO tax code if they use the same or different.

However, note TT will generate ES vouchers based on your 2024 tax by default, assuming your 2025 withholding is the same as 2024.  If your income is stable that can often be an overpayment in ES.  You need to determine what your safe harbor amount is.  In TT under Other Tax Situations / Form W4 and Estimated Tax Payments you can provide 2025 information and it will update the vouchers if paying ES baed on current year tax is more advantageous.  If using desktop TT check Forms mode, "Est Tax Options" to see the calculation.

If you owe ES you can also increase withholding to cover it, tho there are only 6 months left in the year to make up for that.

If you do need to pay ES but didn't pay Q1 ES then you can minimize the penalty by paying 50% of the total ES for the year in Q2 (due date 6/16/25).  You will still get some penalty for missing Q1 but the sooner you pay it the sooner the penalty stops accruing.

Finally to make ES payments, don't bother with checks and vouchers, pay IRS directly online if able at irs.gov

For more info on ES see https://www.irs.gov/faqs/estimated-tax