Under next year return (2023) what is the estimated balance due mean?

[shromas1146]

this pops up after you have filed and then access your turbo tax for the 22 taxes(documents)
Next year's return (2023)
Estimated balance due:

[ErnieS0]

Estimated balance due means TurboTax thinks you will owe money when you file your 2023 tax return.

This happens if you owed money in 2022 or if you used the W-4 and Estimated Taxes section. If you print your return, you should see estimated tax payment vouchers (Form 1040-ES 1-4) of recommended amounts to pay every quarter.

The IRS levies a penalty for underpayment of estimated tax if you didn’t pay enough tax throughout the year, either through withholding or by making estimated tax payments.

Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller.

Refer to Penalty for Underpayment of Estimated Tax

[10276]

On the same line of question because I just filed 2022 income tax with TurboTax online Premier 

My 2022 tax return, TurboTax pdf has a voucher to pay my tax owned for 2022 before April 18, 2023 due to a capital gains on my rental sale.

Also TurboTax has 4 more "2023 Form 1040-ES Payment Voucher" telling me to pay more taxes dues from April 18, 2023 through January 16, 2024.

Knowing that I will not receive any more huge capital gains in 2023 like in 2022 tax.

Question is:

1. Should I make the payments in 2023 per these vouchers.

2. Or just ignore this 2023 estimate tax because will not owe any tax or my tax liability will be less than $1,000 for 2023 income tax.

Please help with an answer since April 18, is just around the corner and having to make payment on 2 vouchers at a time.

Thanks for helping

[ShirlynW]

That depends on your situation. If your income will not increase substantially in 2023, you will not make the estimated tax payments.

[Todd in Texas]

For the 2022 tax year, my wife and I received a refund of approximately $2,500.

Turbo Tax is estimating we will owe about $6,600 for the 2023 tax year. I am retired and have not opted for Social Security.  Next year my income from a pension plan will be the exact same amount and I am not planning on signing up for Social Security in 2023.  So no change for me.

My wife is still working and plans to work in the exact same job next year.

We filed a joint return and will do so again for the 2023 tax year.

While the vast majority of our investments are in mutual funds, we did have about $2,000 in dividends  from an individual stock we own.  We are not adding to our holding in 2023 so I would estimate the dividends would be about the same.

We took the standard deduction and unless something exceptional happens, we will do the same in 2023.

So, with all of the above information, why is Turbo Tax estimating our taxes will increase by around  $9,100?

Thank you.

[PattiF]

TurboTax may be assuming that you will begin collecting Social Security in 2023.

The quarterly estimated payments are suggested amounts and do not need to be paid if there will be no change to your income.

@Todd in Texas