Estimated tax after a refund?!

"Andrey Tarasevich" wrote

You must have told the program something for it to believe that you will need to make estimated tax payments. But, the software isn't the law, nor is it the government. So, feel free to not pay what the software recommends if you are confident that there will not be any additional income or reduction of expenses / deductions in 2006. No one in the government is going to know that you are not making estimates, or even know that your software suggested that you make them.

-- Paul Thomas, CPA snipped-for-privacy@bellsouth.net

The "glitch" is called GIGO and hapens all the time with TT and other tax programs. They just don't understand that their user misintrprets their question. I would *suspect* that you told them the amount of your withholding under their question about what installment payments you made. If you did not pay installments and you got a withholding refund you *obviously* don't need their 1040 ES vouchers. Just thow them away. The IRS isn't expecting any estimated payments from you. This is a strange year where if you are subject to AMT you will most probably underwithhold if you leave everything "as is". So, just make sure your 2006 withholding is as much as your 2005 taxes (110% if your AGI in 2005 was over $150K), or within 90% or $1,000 of what your actual (not estimated) taxes will be in 2006. ed

My guess is that you entered incorrect information about the number of allowances you're claiming on your 2006 W-4, so it thinks you aren't withholding enough from your paychecks. There's probably a worksheet that shows what it has computed as your estimated total tax and withholdings in 2006. Also, did you have significant capital losses in 2005? Maybe TT assumes capital gains and losses are one-time events, so it doesn't include similar adjustments in its

-- Barry Margolin, snipped-for-privacy@alum.mit.edu Arlington, MA

I don't know if that is the case. I have been using TT forever (_not_ the online version though). This year my taxes ran OK, my daughter #1 return ran OK, but for some reason daughter #2 return insisted on printing estimated state (not federal) vouchers for $83/quarter even thought she was to receive a (very) small state refund. I double and triple checked the numbers and the sanity of the numbers on the return and all were good. I don't know why or what triggered TT to print those estimated tax vouchers, but since the return itself was OK, I don't intend to spend any time or effort to figure out the source of the glitch since I am done with taxes for this year. I will merely note that it occurred.

That is true of course, but when the software prints out totally unexpected and clearly incorrect estimated tax vouchers, one cannot wonder if there is an error somewhere on the return that caused the vouchers to print, or a software error that may cause other incorrect calculations on the return. I for one don't like to ignore unexpected output from software -- it may result in errors that effect more than just the printing of the unexpected forms. However in my case, the input was fine. It appears to be a minor software issue. Like I said, I don't use the online version but I would guess that they are both based on the same engine.

--

-Ernie-

"There are only two kinds of computer users -- those who have suffered a catastrophic hard drive failure, and those who will."

Have you done your backup today?

I have a simular situation and hope someone could help me out on it. I completed my taxes today and I also am getting a refund. We are self-employed and did not pay any estimated taxes in

You should know that IRS does not routinely monitor estimated tax payments. The only times that I know of are when you are negotiating a payment schedule or offer in compromise. Otherwise, IRS just looks at the end result when you file your return for the year -- if you paid enough, OK; if not, then you owe a penalty. Lanny K. Williams, CPA Nawarat, Williams & Co., Ltd. Income Tax Services for Expatriate Americans

True, in the main. However, they do routinely monitor estimated payments by professional subject to circular 230.

You can run, but you can't hide.

ChEAr$, Harlan