Does anyone know of a free or low-cost calculator of estimated Federal income tax? It should cover at least Schedules B and D, the worksheet that computes taxable Social Security, and the Qualified Dividends and Capital Gains worksheet; it need not handle itemized deductions. (I have created an elaborate workbook that makes these estimates, but keeping it up to date every year is a pain, even without considering the possibility of my making a mistake. I'm hoping I've just been reinventing the wheel.)
The motivation for this is that I need to sell a chunk of my stock fund to make a down payment on a house. As you may know, stocks are at an all-time high, so I'm going to have pretty large capital gains, by my standards anyway. I need to get a handle on what that will do to tax year 2024's bill, so that I can make the proper estimated tax payments.
If you know of a calculator that does what I need for 2023 but it hasn't been updated for 2024, I'd still like to know about it because the inflation-adjusted threshold numbers won't be much different between the two years.
It is an Excel spreadsheet that contains most if not all, IRS 1040 forms, schedules etc. I've used it for the last 5 years as a double check when e-filing. I don't use Excel and I've found it works best using LibreOffice as opposed to OpenOffice.
Just did do my e-file, and the two were only 2 dollars apart re final tax. I do 1099s -INT, -R, -B, -SSA, -DIV, Sch D & more
I haven't looked at this lately and cannot say if it does exactly what you want, but check it out. Maybe if it doesn't do it all you can have a side spreadsheet to calculate an entry needed for this spreadsheet.
Thanks to the four folks who replied! I was able to complete my task and get the full extent of the bad news. (But of course it's better to know than not to know, and now I can make adequate estimated tax payments and avoid a penalty when I file next year.)
I thought it would be helpful to others if I include all four suggestions in one post, with a few comments. Some of the things that were dealbreakers for me in #3 and #4 might not be for others.
Calculations are done online; there's nothing to download. On the other hand, you may have privacy concerns.
Easy to use, and without the capital gains it matched my own computation within a very few dollars. Adding in the capital gains told me what I needed to know.
It's not yet updated for tax year 2024, so with 2024 inflation- adjusted brackets the extra tax hit may be a bit less than it predicts.
Consists of downloadable Excel spreadsheets. In addition to Federal, California taxes are included, a plus for me. (Other states don't seem to be available.) Spreadsheets are already updated for the 2024 tax year, another plus.
Spreadsheets are .xls, not .xlsm, because the site claims compatibility with Excel _5_ and above. (I have Excel 2010, and they seemed to work fine.)
The site is http not https, so you have to override a couple of warnings from your browser, when visiting and when downloading the spreadsheets. The site offers both Windows installers and just-the- spreadsheets ZIP files.
The only flaw I found, not a dealbreaker: There's no box to enter Social Security, or even the taxable part. Instead you have to compute your taxable Social Security yourself, then include that in the "other income" box with other miscellaneous income. I've emailed the author, suggesting this as a possible enhancement.
Calculations are done online, and the site says no information is saved. You don't need to enter your tax ID number or other identifying information.
It's fairly easy to use, but it says in several places that you can't use it if you have don't have an income stream from which withholding is taken. That rules out retired people who choose to pay estimated taxes rather than having taxes withheld. I tried to cheat by entering appropriate amounts in inappropriate boxes, but it wouldn't let me proceed without also entering withholding. That's a pity; if it didn't have that limitation it would be a useful tool for a lot more people.
High marks for comprehensiveness, not so much for ease of use.
It's the most comprehensive of the four, but I found it too difficult to work with, because it tries to mix interview-type questions with entering some numbers on IRS-style forms and schedules. (A plus is that it includes a _lot_ of forms and schedules, so it's likely most people would find the forms they need.) It's _extremely_ fussy about making you enter data in very specific spots, often off to the side or on different forms. (For instance, the "over 65" box was protected, and it took me quite a while to discover that I had to enter my date of birth off to the side instead of just checking the box as I had in Filing Status.) If I were trying to _file_ my taxes, as opposed to planning them, I would persevere because I'm sure I could learn to use it. But since the first two listed above met my needs, I shelved this one.
Since you mentioned you would be okay with a 2023 calculator, couldn't you just use Turbotax 2023 etc (desktop, not website) ?
Also, you mentioned your main motivation is to estimate your liability to make estimated tax payments. In the case of a spike in your income for 2024, you can use the Prior Year Tax Safe Harbor to avoid underwithholding penalty. That is typically
100% of 2023-Tax or 110% for higher-income (in 2023). More details in Form 2210 and Instructions for Form 2210 If you can meet the safe harbor, you can delay the finer calculations until tax filing deadline next year
If I had Turbotax 2023 I imagine I could use it. :-)
Thank you for this! I completely forgot about Form 2210 and the safe harbors. I still want to _compute_ my 2024 tax so that I can make sure I set aside enough money to pay it, but I don't actually have to _pay_ most of it till April 2025. (Several people provided links to helpful tax calculators; see my "mini-reviews" article in this thread for the list.)
Incidentally, Part I of Form 2210 says your _withholding_ must be at least the required minimum amount (90% of this year's tax or
100%/110% of last year's). But Part III says your withholding + estimated payments, quarter by quarter, must be at least the required minimum amount. "Who Must Pay the Underpayment Penalty" in the
formatting link
instructions agrees with Part III of the form.
Am I missing something, or is line 6 of part I incorrect in saying "Don't include estimated tax payments"?
One year, I had to perform this calculation manually. This is one painful form to fill out as the calculation is made separately for each quarter and there are almost as many steps as a tax return.
The purpose of performing the calculations in Part I is to determine if you met your required annual payment through withholding alone. If you did, then the penalty does not apply and you don't perform the calculations on the rest of the form.
IRS presumes that income was even throughout the year. The burden is on the taxpayer to show that income varied and would therefore benefit from using the annualized income method in which the penalty is minimized or waived entirely. Even if the taxpayer intends to use the annualized income method, he still must fill out Part I.
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here.
All logos and trade names are the property of their respective owners.