Quote:
Originally Posted by Bill14564
I would be careful with that advice. I am working out a strategy to avoid a penalty next year; my income increased this year and resulted in a penalty.
As dewilson58 points out, rates are low and my penalty is very small. Still, I would like to avoid it for next year.
|
For most taxpayers, your estimated payments need to equal or exceed the amount of the total tax paid in the previous year. The total tax is shown on Line 24 of the 2021 tax return. You divide that number by 4 and make that payment 4 times during the next year. For some higher income taxpayers, the formula is a little different. But, Turbotax calculates the amounts either way. So, even if you have a huge income increase in 2022, you still will not owe a tax penalty. I have been doing it that way for over 30 years, and never owed a tax penalty.