Under Payment Penalty

[Hved]

I just realized that the vouchers that Turbo Tax made for me for 2023 estimated taxes last year were not right.  They were $305  short each quarter so I paid $1220 less than my last year taxes.  I, of course, had to pay a $94 penalty.

I checked this years vouchers for 2024 and they add up to 100% of my 2023 taxes paid. Why were the 2023 estimated tax vouchers off by $305?

[Kat]

TurboTax uses a couple of ways to calculate your estimated tax payments.  Though the vouchers are helpful, they are not exact.  

Likely your vouchers indicated 90% of your prior-years taxes due, and you had a higher income than anticipated.  Or perhaps you are a higher-income individual, in which case you'd be required to pay 110% of your prior year's taxes in estimated tax payments.  I'm sharing a link to a TurboTax FAQ that will explain how much the IRS expects from you on a quarterly basis.  

How does TurboTax calculate my estimated tax payments? 

[Hved]

Thanks Kat... that makes sense. However, my voucher was 85% of my prior years taxes.  Was there a glitch?

[Kat]

• @Hved I can't say.  I will say this:  the voucher calculations are not precise.  Each taxpayer is responsible to calculate their own estimated tax payments due.  I'm sorry you incurred a penalty.  We did, too.....but it was our oversight.