TurboTax Estimated Tax Handling

[Jerry1]

I was doing a friend's taxes and they didn't include their estimated tax payments in the material they gave me. I remembered it from last year so I went and looked and it was there in the 2021 file. What bothers me is that I imported the data for this return from last year ('21 into '22) and TT did not pull in the estimated payments or ask me if it should. Does anyone know if TT would normally pull that information in when it imports the information from the prior year? Or, do you always have to type it in.

Everything is fine on my friend's return, but I feel like I could have possibly missed that and I think TT should have automatically pulled that in given that the estimated payment vouchers are clearly in the prior year's return. It makes me wonder if it misses (or if I'm missing something) like a loss carryforward that should transfer over during the import.

 

[audreyh1]

You have to enter in what you paid and when you paid it. TT has never imported estimated tax vouchers from a previous year or assumed those recommended payments were made.

The interview process asks you for that info each year.

 

[badatmath]

I don't pay estimated taxes but seems more than a little weird not to import it!

 

[Jerry1]

You have to enter in what you paid and when you paid it. TT has never imported estimated tax vouchers from a previous year or assumed those recommended payments were made.

The interview process asks you for that info each year.

Thanks for confirming.

I don't pay estimated taxes but seems more than a little weird not to import it!

I agree. It seems like it should have a screen that says "TT shows the following for estimated payments for last year. Were these paid?". Basically, the same form I entered the data, but pre-populated.

 

[youbet]

You have to enter in what you paid and when you paid it. TT has never imported estimated tax vouchers from a previous year or assumed those recommended payments were made.

The interview process asks you for that info each year.

+1

Yep. I can't see a way TT could import estimated tax payments unless, of course, the gov't opened up some path for them to query the gov't records. I don't see that happening anytime soon.

If you choose to pay estimated taxes, you do so and then enter what you paid, and when, into TT. Pretty simple really.

 

[Jerry1]

+1

Yep. I can't see a way TT could import estimated tax payments unless, of course, the gov't opened up some path for them to query the gov't records. I don't see that happening anytime soon.

If you choose to pay estimated taxes, you do so and then enter what you paid, and when, into TT. Pretty simple really.

In my case, TT generated the estimates as part of me preparing this person’s 2021 return. So, when I imported the file into 2022, it could have grabbed that information. I agree, if you didn’t use a software that calculated the estimates in the prior year, you’d have to enter it.

 

[youbet]

In my case, TT generated the estimates as part of me preparing this person’s 2021 return. So, when I imported the file into 2022, it could have grabbed that information. I agree, if you didn’t use a software that calculated the estimates in the prior year, you’d have to enter it.

But that information is the TT suggested estimated tax payments based on your prior years taxes, not the amount you actually sent in. I've never had that work out. So every year, with your suggestion, TT would import data that I'd have to change from TT suggested to what I actually did. If I didn't change it, immediate error with the IRS. You need to file the actual est tax payments you made, not what TT suggested you make based on your prior years return and assuming this year would be very similar.

Do you actually send in est payments exactly per the TT suggestion? I don't think that's very common.

 

[Jerry1]

Do you actually send in est payments exactly per the TT suggestion? I don't think that's very common.

I don’t but that’s because I don’t generally send in estimates. However, for my friend, yes, I used exactly what TT suggested. They calculate estimates that handle the hold harmless provision. Plus, you can override their suggested amounts. So, even if it’s uncommon to use the TT suggested amounts, I don’t think it would be uncommon to use the amounts that are produced using their software which prints out the payment vouchers that you would send in anyway.

 

[rk911]

I don't pay estimated taxes but seems more than a little weird not to import it!

it may be because TT has no idea if what it recommended was actually paid. in our case it’s not.

 

[Midpack]

Do you actually send in est payments exactly per the TT suggestion? I don't think that's very common.

I’ve been using TT almost since it was introduced, and never paid the estimated taxes it recommends once. My tax situation is never the same from one year to the next, so it wouldn’t make sense to me. Maybe others do? It may be a throwback to the days people sent in a filled out 1040-ES voucher each quarter via snail mail, so TT preprints them. I haven’t done that in many, many years (all electronic online).

 

[RunningBum]

I usually pick my topics rather than go through the step-by-step walk through, but TT does ask about estimated taxes paid. It's in the Deductions and Credits section. How did you miss this? Or are you just saying you nearly missed it because it wasn't pre-filled in? The danger in using estimates suggested by them is people might accept them by clicking through them without verifying that they actually made those exact payments. Maybe they could flag it by saying something like "estimated taxes were suggested after completing last year's taxes, did you make them?"

I don't think I've ever simply accepted TT's estimated tax suggestion to pay during the next year. I find it annoying that it prints by default, even when I just save to a pdf file. I now uncheck those so that if I'm looking back at a previous return I don't have to scroll through those.

 

[PaunchyPirate]

I have ALWAYS just ignored TurboTax's self-generated forms for submitting estimated taxes for the coming year. So, I guess I would not have expected them to import this from the previous year's file. Never gave it a thought that it should.

 

[Jerry1]

I usually pick my topics rather than go through the step-by-step walk through, but TT does ask about estimated taxes paid. It's in the Deductions and Credits section. How did you miss this?

I didn’t miss them. But, I didn’t catch them on my first pass either. I caught it when checking my work where I have a step to look at last years taxes.

I don’t use the step by step so TT didn’t actually ask me about estimates, but yes, there is clearly a section that includes entering the estimated taxes. I didn’t pull that up on my first pass.

Seeing the responses on this topic, I guess I can see why TT decided not to pull the numbers in from last year. Though I still think it would be nice.

Remember, this was a friend’s return, so while I’m familiar with her situation, clearly not as well as I am my own. I give her estimates and have her mail in because of her age and personality. If I started moving things around and trying to hit her actual tax number, she’d be all stressed out. I give her the estimates and forms that TT generates and that at least keeps her out of a penalty situation.

For me, I’ve done some estimates in the past, but for 2023, I’m going to do something different. I’m going to just do a withdrawal from my IRA at 100 percent withheld. The amount will be what I need to match ‘22’s tax liability so I meet the hold harmless provision. I don’t care if I over or under pay as long as I don’t incur a penalty. In 2024, I plan on moving the withholding on my pension to zero and my year end withdrawal from my IRA will be exactly my ‘23 tax liability to cover hold harmless. I learned that on this forum and I think it’s a good idea for me.

 

[target2019]

Estimated Tax Payments dates only appear in Tax Payments Worksheet (keep for your records) 2022.

Desktop version of TurboTax Home and Business installed on Windows 10.

So you should see the dates, but it is for you to enter the payments.

 

[target2019]

Jerry1,
When doing a great many taxes some years ago I made a check list of what I should do, and in what order. Probably overkill for a few submittals.

We were woking with two monitors, and last year's program was on one. So part of the workflow was to use my checklist to see what happened last year as well. One of the interesting finds was that most did not mention estimated payments from last year, or whether they actually made them. So followup was required.

 

[RunningBum]

Not that you'd want to leave this for the IRS but they would match the estimated payments up with the return, and refund the appropriate amount of money.

 

[Jerry1]

Not that you'd want to leave this for the IRS but they would match the estimated payments up with the return, and refund the appropriate amount of money.

Yeah, they’re actually pretty good about things like that when they can match them up electronically. Though, as you say, not something I’d rely on them to do. Of course, if they waited a few months or more to catch it, they’d probably pay me interest.