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Why are my 2018 estimated payments not less when my standard (married filing jointly) deduction will almost double?
Why are my 2018 estimated payments not less when my standard (married filing jointly) deduction will almost double? I am self-employed and expect my taxable income to remain about the same. I assumed my quarterly estimated payments calculated by TurboTax would have dropped significantly.
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Why are my 2018 estimated payments not less when my standard (married filing jointly) deduction will almost double?
First, you should review the Estimated Tax section entries and make sure you have gone all the way to the end. The default setting is to base the estimated tax payments on 2017 tax liability (regardless of changes), but you can change it to the 2018 estimated tax setting - see screenshot below. Also, make sure you have gone through each screen carefully. The program has been updated for all the standard deduction increases and limits on Schedule A, etc. However, for tax credits, the ES section asks you to just enter the total amount you expect to qualify for - so, if you have children, you will need to remember to increase your tax credit amount from $1,000 per child to $2,000 per child (assuming you would qualify) when you get to the tax credit entry screen.
Now, while the standard deduction will be doubling, the personal exemptions were also eliminated. This year a MFJ couple would be able to deduct a standard deduction of $12,700 plus two personal exemptions of $4,050 each for a total of $20,800. Next year the standard deduction will rise for MFJ to $24,000 - but there will be no personal exemptions. So, the true tax impact is likely to be less than many are expecting.
If you need to return to the section to prepare estimated taxes, you can follow these steps - Click Federal taxes > Other Tax Situations > Other Tax Forms > Form W4 and Estimated Taxes (or use the search feature and search for "W4" and click the jump to link).
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Why are my 2018 estimated payments not less when my standard (married filing jointly) deduction will almost double?
First, you should review the Estimated Tax section entries and make sure you have gone all the way to the end. The default setting is to base the estimated tax payments on 2017 tax liability (regardless of changes), but you can change it to the 2018 estimated tax setting - see screenshot below. Also, make sure you have gone through each screen carefully. The program has been updated for all the standard deduction increases and limits on Schedule A, etc. However, for tax credits, the ES section asks you to just enter the total amount you expect to qualify for - so, if you have children, you will need to remember to increase your tax credit amount from $1,000 per child to $2,000 per child (assuming you would qualify) when you get to the tax credit entry screen.
Now, while the standard deduction will be doubling, the personal exemptions were also eliminated. This year a MFJ couple would be able to deduct a standard deduction of $12,700 plus two personal exemptions of $4,050 each for a total of $20,800. Next year the standard deduction will rise for MFJ to $24,000 - but there will be no personal exemptions. So, the true tax impact is likely to be less than many are expecting.
If you need to return to the section to prepare estimated taxes, you can follow these steps - Click Federal taxes > Other Tax Situations > Other Tax Forms > Form W4 and Estimated Taxes (or use the search feature and search for "W4" and click the jump to link).
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Why are my 2018 estimated payments not less when my standard (married filing jointly) deduction will almost double?
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