why do I have "Estimated Payments to Make for Next Year's Return" on the 1st page of my TaxReturn file? "Estimated Payments for 2025 - Do not mail these vouchers with your 2024 income tax return. The estimated vouchers displayed below are used to prepay your 2025 income taxes that will be filed next year If you expect to owe more than $1,000 in 2025, you may incur underpayment penalties if you do not make these four estimated tax payments. This printout includes your estimated tax vouchers for your federal estimated taxes (Form 1040-ES)" Why would I do any prepayments. I declined it in the questionarrie, but it is still adding in the file report, how can I remove it?
You can throw them away if you don't need them. Why did 1040-ES estimated tax vouchers print out? Do I need them?
I guess I can throw them away, but I am trying to understand why I even have them? In 2023 Tax Return I didn't have this notice/warning about potential penalty. The federal tax I owed in 2023 was below 500 USD, now for 2024 it is slightly above 1000 USD. Is that a reason I have those vouchers with a warning? I would like to avoid any penalty, but I don't want to send physical checks every 4 months for the income that I am not able to predict.
"you may incur underpayment penalties if you do not make these four estimated tax payments" - that phrase seems quite scary, but I do all payments with my tax return in full in February-March by doing e-file. I don't understand why I need to mail checks every 4 months to avoid the penalty by paying in advance.
If you owe above $1,000 it could trigger a tax penalty.
The underpayment penalty will be assessed if any of these apply:
To avoid the under payment penalty:
"Typically, underpayment penalties are 5% of the underpaid amount, and they're capped at 25%.
Underpaid taxes also accrue interest at a rate that the IRS sets annually."
To avoid this situation it is recommended that you adjust your W-4 with your employer or pay estimated taxes.