Turbo Tax Question

[Tandemlovers]

I hope I am posting this in the correct forum.
I have been preparing our taxes using TurboTax for the past twenty years.
This year, for the first time, TurboTax included estimated quarterly tax vouchers for 2011 of $723 each.
Our AGI in 2009 was 156K, and increased to 182K in 2010.
We did not owe any taxes for either year.
Neither of us is self-employed.
Is TurboTax making assumptions that our income in 2011 will similarly increase?
Thanks for any and all help.

 

[RockyMtn]

Yes TurboTax makes that assumption. Whether or not you need to make the payments really depends on what your AGI will be in 2011.

 

[Tandemlovers]

RockyMtn, thanks for the quick reply.
We are expecting another 18K or so in extra income this year from a 457f deferred comp account that has reached its 5 year maturity, but taxes will be subtracted at the time of the disbursement.
Thanks again for your help.

 

[RockyMtn]

Given your going to be over the $150k threshold again your tax withholding must be at least 110% of your 2010 tax liability. So, if you think that your total withholding for 2011 will exceed last year's withholding by 10% you don't need to make estimated payments. If you don't exceed last year's withholding amount by 10% and don't make the estimated payments throughout the year you could be subject to a penalty on the underpayment.

 

[Tandemlovers]

Sounds like I need to look into this before the first quarterly is due.
Though we didn't owe taxes this year, our refund was $158, maybe a little too close for comfort.
Thanks again for the info!

 

[RockyMtn]

try filling out this worksheet and see how it compares to what TTax suggests. Good luck.

http://www.irs.gov/pub/irs-pdf/f1040es.pdf

 

[Tandemlovers]

Thanks, RockyMtn, for the link. Just did the calculation.
Looks like I will be setting aside money for quarterly payments.
I wish we weren't forced to take the deferred comp distribution.
Thanks again for your help!