Do I have to pay my estimated tax?


B

Beau Randall

On my 1040 in April, without understanding the
ramifications, I declared an estimated tax of a certain
amount. Two weeks ago I got a 1040-ES form in the mail. It
seems you can either pay this in one lump sum or in three
installments (last April, Sept., and Jan). As I filed using
TurboTax Online I'm rather surprised I wasn't forced to make
the forced payment.

But regardless, just a simple question - do I _have_ to pay
this tax now? I understand there will be a penalty next
April. I just want to know if there's potential for the IRS
auditing me for letting this go until then. I'm closing
escrow on my first condo next month, I really could do
without this extra financial burden.

Thanks for any advice.
 
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S

Shagnasty

Beau Randall said:
On my 1040 in April, without understanding the
ramifications, I declared an estimated tax of a certain
amount. Two weeks ago I got a 1040-ES form in the mail. It
seems you can either pay this in one lump sum or in three
installments (last April, Sept., and Jan). As I filed using
TurboTax Online I'm rather surprised I wasn't forced to make
the forced payment.

But regardless, just a simple question - do I _have_ to pay
this tax now? I understand there will be a penalty next
April. I just want to know if there's potential for the IRS
auditing me for letting this go until then. I'm closing
escrow on my first condo next month, I really could do
without this extra financial burden.
There is always an audit potential, but I don't think
failure to pay an estimate would trigger an audit if you
paid the tax and penalty when you file your return.

I have clients who have no withholding and pay no estimates.
They pay it all with a penalty when they file and never get
audited.
 
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D

D.F. Manno

On my 1040 in April, without understanding the
ramifications, I declared an estimated tax of a certain
amount. Two weeks ago I got a 1040-ES form in the mail. It
seems you can either pay this in one lump sum or in three
installments (last April, Sept., and Jan). As I filed using
TurboTax Online I'm rather surprised I wasn't forced to make
the forced payment.

But regardless, just a simple question - do I _have_ to pay
this tax now? I understand there will be a penalty next
April. I just want to know if there's potential for the IRS
auditing me for letting this go until then. I'm closing
escrow on my first condo next month, I really could do
without this extra financial burden.
No, you don't have to pay it now. IRS won't audit you. (They
don't work that fast anyway.) But as you said, if an
underpayment penalty is due because you did not pay
estimated taxes, you will have to pay that.
 

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