Paying Estimated Taxes: 1st Time How-To?

[clobber]

DD needs to make estimated payments this year. 2022 will be her second year filing taxes, with 2021 being the first. When she goes to make a Direct Pay transaction from the IRS Website , the second screen requires authentication based on, "verifies your identity using information from your 1040 filing history." That is, it needs information from earlier tax returns beginning in 2020 and going back. However, she did not file in those years. There is not an option to say did not file.

Anyone know how to get around this?

 

[COcheesehead]

Mail a check.

 

[RobbieB]

Yeah, that's what I do.

 

[Ronstar]

Mail a check.

+1. And follow the IRS instructions for estimated payments as to what to write in the memo section of the check and where to mail it.

 

[clobber]

Mail a check.

I'm hesitant.

1) People dont have checks anymore. Well, some people. I dont even know if DD does.

2) All the horror stories with people who have sent in payments but things are not recorded properly. I'd much rather this all be done electronically.

 

[COcheesehead]

I'm hesitant.

1) People dont have checks anymore. Well, some people. I dont even know if DD does.

2) All the horror stories with people who have sent in payments but things are not recorded properly. I'd much rather this all be done electronically.

…which you can’t do.
If the check clears, there’s your receipt.

 

[RobbieB]

Cool, you figure it out then.

For 8 years I've been sending quarterly payments to the IRS and the FTB.

So 8x4x2=64 quarterly payments all recorded perfectly. I don't worry about it.

And then for next year, you will have a return to reference for 2023 electronic payments.

 

[MissMolly]

I have been paying estimated taxes for years and use the IRS Direct Pay system. Never had an issue. https://www.irs.gov/payments/direct-pay

 

[cathy63]

I'm hesitant.

1) People dont have checks anymore. Well, some people. I dont even know if DD does.

2) All the horror stories with people who have sent in payments but things are not recorded properly. I'd much rather this all be done electronically.

I think she can use the options to pay by credit or debit card, but there is a fee for those.

Otherwise, she can send a cashier's check or money order if she doesn't have a checking account or can't get checks by Monday. The odds of a payment being recorded incorrectly are minuscule if she sends in a 1040-ES voucher and fills it out properly. The 1040-ES is here: https://www.irs.gov/pub/irs-pdf/f1040es.pdf

Most of the stories you've heard are about payments sent in with paper returns. The payments were credited correctly but the returns weren't processed so some letters were sent saying that the IRS had money but no return. This is not your DD's situation.

 

[cathy63]

I have been paying estimated taxes for years and use the IRS Direct Pay system. Never had an issue. https://www.irs.gov/payments/direct-pay

A new taxpayer can't use this system. You have to have a tax return from 2020 or earlier.

 

[MissMolly]

A new taxpayer can't use this system. You have to have a tax return from 2020 or earlier.

She is not a new tax payer. This is her second year paying taxes so it should work for her. Her first year was 2021. Why would she need to go back two years to 2020?

 

[cathy63]

She is not a new tax payer. This is her second year paying taxes so it should work for her. Her first year was 2021. Why would she need to go back two years to 2020?

That's how the payment page works. Here's a screenshot.

 

[MissMolly]

Hmmm. You’re correct. I wonder when they will update that to 2021? I never noticed all these years that it was a year behind.

 

[Retire2023]

We set our estimated tax payments up in the EFTPS system. It appears to be a different system than direct pay. I used both this year as direct pay would only allow two payments to be scheduled at on time. EFTPS will allow me to do all 4 at one time spread each quarter. That might be another avenue to try. It's been a while since I created the EFTPS account, but as I recall, they mailed something to my 1040 return address for me to verify and then I was in.

 

[N02L84ER]

What would happen if she chose 2020 and entered an AGI = 0?

 

[youbet]

We wrote checks for estimated fed taxes for many years with no issues.

Now we have to take RMD's so I just have the withholding taken out of that and don't do estimated taxes. But I wouldn't hesitate to go back to writing checks for estimated payments if needed.

 

[youbet]

1) People dont have checks anymore. Well, some people. I dont even know if DD does.

Everyone should have some way to issue a paper check. Their use has been greatly reduced but not completely eliminated. See if your DD has a bank or CU checking account. If not, can she write checks on her money market or brokerage account? If not, can you write the check on your bank, CU or brokerage account? If not, go get a money order for this payment and one of you open a checking account, money market account or brokerage account that you can write checks on for the next 3 payments. This really isn't a big deal.

Why the estimated payments? Is your DD's income such that she can't have withholding? Graduate student stipends or similar?

 

[Sunset]

DD needs to make estimated payments this year. 2022 will be her second year filing taxes, with 2021 being the first. When she goes to make a Direct Pay transaction from the IRS Website , the second screen requires authentication based on, "verifies your identity using information from your 1040 filing history." That is, it needs information from earlier tax returns beginning in 2020 and going back. However, she did not file in those years. There is not an option to say did not file.

Anyone know how to get around this?

She could try entering zero and see if that works.

Otherwise, she can set up (which she should anyhow) a login for irs.gov and in the site she can make estimated payments without any previous year validation of AGI, because they know it's her.

 

[JoeWras]

We set our estimated tax payments up in the EFTPS system. It appears to be a different system than direct pay. I used both this year as direct pay would only allow two payments to be scheduled at on time. EFTPS will allow me to do all 4 at one time spread each quarter. That might be another avenue to try. It's been a while since I created the EFTPS account, but as I recall, they mailed something to my 1040 return address for me to verify and then I was in.

Yes. Last year was the first year we used it and it worked fine. I like the fact I can "set and forget" for the year. The systems seems very old school but it works.

The process of signing up took about 2 weeks total. We are now beyond the deadline for the 1st quarterly payment so signing up this year has to be for the subsequent quarters.

BTW, I also owed on my 1040 this year and used EFTPS to make the payment. You have to be careful to put the correct tax year in on your payment.

 

[jim584672]

I've been using https://www.eftps.gov/eftps/ to make payments as needed.

 

[clobber]

We set our estimated tax payments up in the EFTPS system. It appears to be a different system than direct pay. I used both this year as direct pay would only allow two payments to be scheduled at on time. EFTPS will allow me to do all 4 at one time spread each quarter. That might be another avenue to try. It's been a while since I created the EFTPS account, but as I recall, they mailed something to my 1040 return address for me to verify and then I was in.

Yes, she was going to try EFTPS until I read that they have to send you something in the mail which takes a week or more. And then the problem becomes the "1040" address. She did file in 2021, but not 2020. When signing up for EFTPS I wonder what it asks for. Did not get that far.

 

[clobber]

What would happen if she chose 2020 and entered an AGI = 0?

Yeah, Might try that. The very first question was how you filed (single, married, etc) so I figured proceeding was useless.

 

[TheWizard]

I've been using https://www.eftps.gov/eftps/ to make payments as needed.

Me too.
I don't recall any tricky hoops to jump through when I first setup my EFTPS account, but that was then, not now...

 

[Midpack]

I've been using https://www.eftps.gov/eftps/ to make payments as needed.

Me too, since 2019, great system. And my state has an equally simple, secure webpage to send in estimated taxes. I can’t imagine mailing a check these days, but to each his/her own.

 

[clobber]

Why the estimated payments? Is your DD's income such that she can't have withholding? Graduate student stipends or similar?

Exactly. In this case undergraduate stipends. Don't even get me started on kiddie tax. Requiring one taxpayer to use information from another taxpayer's return should be illegal.