Quarterly Tax / 1040-ES question

[azurely]

When we did our taxes last weekend, we owed a little over $1k to federal and got around $200 back from the state. We only owed because of the advance child tax credit at the end of 2021, and thankfully I'd saved it all, so it was no big deal to pay it back.

However, I noticed that my return included 1040-ES coupons for about $290/quarter. Are these mandatory, or can we just skip them and do taxes like normal next year? We shouldn't owe again for 2022, because there's no advance CTC this year. We are not self employed and typically break close to even on taxes. I just don't want to get penalized by the IRS for not paying them if they're mandatory.

Thanks for any guidance.

[tealblue]

They aren’t mandatory.

Don’t pay them if you won’t have the same situation in 2022.

[Susie]

Who prepared your taxes? I'm assuming DIY? Obviously if you used a preparer, check with them. But it sounds like the $290/quarter would be in pursuit of a $0 balance on 4/15/2023, assuming an identical year in 2022 to 2021. If the extra $1k in tax liability was solely due to repayment of 2021-specific federal programs and not a function of your actual income, then just skip it. Don't give the IRS an interest free loan.

[clairebear]

A CPA did my taxes and included estimated quarterly taxes of $12,000 each for this year. We paid $43,000 this year due to the sale of some stocks that won't be happening again this year. We should owe a more normal $22,000 next year. I never pay quarterly taxes and always pay the penalty if I do owe. I'm not giving the government an interest-free loan. I can typically make 8-16% in the market which far outpaces the penalty. In your situation, I definitely wouldn't prepay quarterly taxes.

[azurely]

Apr 12, 2022 14:45:29 GMT -5 Susie said:

Who prepared your taxes? I'm assuming DIY? Obviously if you used a preparer, check with them. But it sounds like the $290/quarter would be in pursuit of a $0 balance on 4/15/2023, assuming an identical year in 2022 to 2021. If the extra $1k in tax liability was solely due to repayment of 2021-specific federal programs and not a function of your actual income, then just skip it. Don't give the IRS an interest free loan.

Yes, I used TurboTax. We have a very standard return.

Thanks everyone for the knowledge! 👌