EFTPS Question - Quarterly Taxes

[Marc]

Easy question I hope:

This is first year with estimated taxes. I set aside part of last year's refund for 15 April estimated payment. I have established an account with EFTPS to "pay" my estimated taxes. When I went in today and set up payments for 6/15, 9/15, and 1/15/20 payments, I received a bold notice:

Reminder: Remember to file all returns when due

Do I still need to file form 1040-ES quarterly? If so, paper, online, using Tax Act or some other software? For some reason, I thought setting up an EFTPS account would solve everything.

Thanks for any help,

Marc

[Neill]

Quote:

Originally Posted by Marc Do I still need to file form 1040-ES quarterly

You just pay them via the website and forget it until tax time. Learn the safe harbour rules as this can often let you quit paying until tax time if your income is variable. I only had this problem when working.

[audreyh1]

Quote:

Originally Posted by Marc Easy question I hope: This is first year with estimated taxes. I set aside part of last year's refund for 15 April estimated payment. I have established an account with EFTPS to "pay" my estimated taxes. When I went in today and set up payments for 6/15, 9/15, and 1/15/20 payments, I received a bold notice: Reminder: Remember to file all returns when due Do I still need to file form 1040-ES quarterly? If so, paper, online, using Tax Act or some other software? For some reason, I thought setting up an EFTPS account would solve everything. Thanks for any help, Marc

No!

It’s only talking about the annual 1040 form due on April 15.

No 1040-ES papers required. Using the EFTPS does take care of all the estimated tax documentation.

[Marc]

Neill, thanks. I know safe harbor rules but have decided just to make equivalent payments to what I know this year's tax bill will be (going to do Roth conversion at end of year from rollover IRA to max 22% bracket). Last year (first year of retirement) I took advantage of 0% LTCG bracket so my total taxes were only around 4K versus around $28K this year.

[RunningBum]

I agree with Audrey, they are just reminding you that you still have to file a tax return (1040).

[audreyh1]

Be sure you always select the correct year to apply the estimated payment to. This is generally only an issue when paying the Jan 15 installment when you might inadvertently select the current year instead of the prior one.

[Marc]

Quote:

Originally Posted by audreyh1 Be sure you always select the correct year to apply the estimated payment to. This is generally only an issue when paying the Jan 15 installment when you might inadvertently select the current year instead of the prior one.

Thanks; I didn't fall into this trap (I put down 2019 for 1/15/20 payment) but I can see how the error can easily be made.

Marc

[audreyh1]

I did make that mistake once a long time ago and didn’t realize until a quarter later.

At the time there was a phone number and I was able to reach someone who was able to reassign the year.

[rk911]

Quote:

Originally Posted by Marc Easy question I hope: This is first year with estimated taxes. I set aside part of last year's refund for 15 April estimated payment. I have established an account with EFTPS to "pay" my estimated taxes. When I went in today and set up payments for 6/15, 9/15, and 1/15/20 payments, I received a bold notice: Reminder: Remember to file all returns when due Do I still need to file form 1040-ES quarterly? If so, paper, online, using Tax Act or some other software? For some reason, I thought setting up an EFTPS account would solve everything. Thanks for any help, Marc

nope. your online payments are all you need. been doing the EFTPS for years now. very EZ.

[pb4uski]

Quote:

Originally Posted by Marc .... Do I still need to file form 1040-ES quarterly? ...

No, or at least I don't.

[kaneohe]

Quote:

Originally Posted by Marc Neill, thanks. I know safe harbor rules but have decided just to make equivalent payments to what I know this year's tax bill will be (going to do Roth conversion at end of year from rollover IRA to max 22% bracket). Last year (first year of retirement) I took advantage of 0% LTCG bracket so my total taxes were only around 4K versus around $28K this year.

perhaps I am misunderstanding but it sounds like you intend to make estimated payments based on your 28K taxes for 2019 instead of your 4K taxes for 2018. Also perhaps ? you intend to pay most/all of it for Q4 in Jan 2020.

Wouldn't it be simpler/cheaper to pay based on the 4K for last yr and equal installments ? You possibly might have missed a Q1 installment but it would be simple to make it up by Q2. There might be a small penalty for missing Q1
(if you did) but you might make it up by not paying the extra 24K until April next yr. You might miss the "fun" tho of not having to file Sch AI Form 2210.

[Marc]

Quote:

Originally Posted by kaneohe perhaps I am misunderstanding but it sounds like you intend to make estimated payments based on your 28K taxes for 2019 instead of your 4K taxes for 2018. Also perhaps ? you intend to pay most/all of it for Q4 in Jan 2020. Wouldn't it be simpler/cheaper to pay based on the 4K for last yr and equal installments ? You possibly might have missed a Q1 installment but it would be simple to make it up by Q2. There might be a small penalty for missing Q1 (if you did) but you might make it up by not paying the extra 24K until April next yr. You might miss the "fun" tho of not having to file Sch AI Form 2210.

Yes, I could have paid just $1K per quarter and $24K next April and been legal (just doing a little more paperwork); however, I would have had to increase 2020 withdrawals to cover total of $31K payment in April which would have pushed me into higher tax bracket next year. For the couple hundred of interest I might lose this year, I decided to just fully pay 2019 taxes quarterly.

[kaneohe]

Quote:

Originally Posted by Marc Yes, I could have paid just $1K per quarter and $24K next April and been legal (just doing a little more paperwork); however, I would have had to increase 2020 withdrawals to cover total of $31K payment in April which would have pushed me into higher tax bracket next year. For the couple hundred of interest I might lose this year, I decided to just fully pay 2019 taxes quarterly.

If you did the withdrawals this yr as you apparently are planning to, couldn't you pay the 1K/qtr, bank the rest, and pay the 24K balance next April w/o increasing your tax bracket next yr?

[Marc]

Quote:

Originally Posted by kaneohe If you did the withdrawals this yr as you apparently are planning to, couldn't you pay the 1K/qtr, bank the rest, and pay the 24K balance next April w/o increasing your tax bracket next yr?

Yes; but why; to save about $100 and put a bit of a red flag on my return. Not worth the hassle.

Marc

[Souschef]

I use EFTPS to pay both my income tax due and my estimated:
April 2019 Pay tax due from 2018 1040

April 2019 pay 1 st qtr estimated 2019

June 2019 pay 2 nd qtr estimated 2019
Sept 2019 pay 3 rd qtr estimated 2019
Jan 2020 pay 4 th qtr estimated 2019


I am in CA, so I use the same format for the FTB payments


I like it because it comes right out of my checking account. No paperwork involved. Just make sure there is enough in the account to cover it.

[kaneohe]

Quote:

Originally Posted by Marc Yes; but why; to save about $100 and put a bit of a red flag on my return. Not worth the hassle. Marc

to each his own, I suppose. I estimate paying 6K/qtr less and banking that
6K/qtr at 2.2% in hi yld savings will yield $352. I'm pretty there wouldn't be any red flags since 100% of last yrs taxes is a legitimate safe harbor and likely that many here have used it.

[target2019]

Long before eftps I decided to use vg nj tax free mmf checks for all taxes. I have about 25 years of entries in the booklets now. It's a sweet ritual, where I receive a calendar alert, and pull out the neat accordion wallet. One slot has the vouchers, and I gleefully look at the amount, and commit that number to a check. Fetch a stamp and envelope, and more finance duties to perform. Eventually my vp of signatures finds time to sign, and we walk the sealed letter to the mailbox. I recommend no imbibing during the process.

[pb4uski]

Quote:

Originally Posted by target2019 .... I recommend no imbibing during the process.

You had me until this last part.

[Marc]

Looks like I need a little more help. I forgot to mention that I use Tax Act for taxes. During finalization of tax return, it asked if I wanted to set up quarterly taxes; I said yes. Prior to setting up my EFTPS account, I couldn't find any record of having set up the quarterly taxes (even trying to navigate through Tax Act); thus setting up my EFTPS account. Once I set up the account, I still couldn't find any record of having set up the payments so I set them up. So, last Friday was the withdrawal I set up and today another $7,000 was taken out of my checking account by IRS.

Does anyone know of an easy way to get the $7,000 back or at least not have the IRS take anything in September? If I cancel all the EFTPS payments I set up will that also cancel the ones set up through Tax Act? Why aren't there any records (email confirmations?) for these payments?

Again, thanks,

Marc

[RunningBum]

I have no idea what system TaxAct uses. Do you think they use EFTPS too? Login to your EFTPS account.
- Click on the Payment tab
- Select Check Payment History. Does it show two payments for June, or one? If two you know TaxAct is using it as well. If not, you better figure out how they are doing it so you can verify and modify your other payments.
- Select Cancel a Payment. You cancel a specific payment so cancel duplicates and all of Sept as needed. If TaxAct payments aren't in there, you'll have to figure out how they do it or maybe someone else knows.

I always get an email a few days before, in time to cancel if I need to, so the profile is another thing you didn't set up correctly. "IRS EFTPS Reminder of Scheduled Transaction" is the email subject. Check your inbox and spam folder to make sure you didn't miss it. If it's not there:

- Go to the My Profile tab
- Select Email Address Management.
- Check the box at the top that you want email notifications, and make sure your address is correct
- I'd check your Enrollment Settings and make sure everything else is correct there

I don't think you have a chance in hell of getting that extra $7000 payment back. Just make it up by cancelling or reducing your other payments.