Tax question about underpayment of estimated taxes

[jebmke]

Did turbotax use your 2012 taxes to calculate your 4 estimated payments? That would be the safe harbor.

Yes, unless income is dropping by a lot, safe harbor amount is simpler than doing a lot of work to calculate ES. Opportunity cost is low if you overpay with rates these days.

I did a ROTH conversion this year so the safe harbor number for '14 will be much higher. May have to do the calcs this year.

 

[Animorph]

Those watching AGI and itemizing with a state tax deduction (me) will want to avoid a state tax refund, which goes into AGI. Any state refund will directly cut my Roth conversion amount.

 

[jebmke]

Those watching AGI and itemizing with a state tax deduction (me) will want to avoid a state tax refund, which goes into AGI. Any state refund will directly cut my Roth conversion amount.

Yes, although depending on where you are in the brackets, it could be just a timing issue since you lowered your AGI the prior year so any ROTH conversion then could be higher.

 

[gerntz]

Those watching AGI and itemizing with a state tax deduction (me) will want to avoid a state tax refund, which goes into AGI. Any state refund will directly cut my Roth conversion amount.

You can cover that with greater charity gifting.

 

[scrabbler1]

Those watching AGI and itemizing with a state tax deduction (me) will want to avoid a state tax refund, which goes into AGI. Any state refund will directly cut my Roth conversion amount.

A state income tax refund, or in my case a state property tax rebate, will count in the following year's AGI which can affect the federal subsidy for the ACA.

 

[Z3Dreamer]

The IRS's estimated tax rules, complicated exceptions to them and taxpayers fluctuating incomes keep CPA's busy. Large corporations with a multi-state presence, large book to tax differences and fluctuating income are even worse.