Estimated taxes and $7500 tax credit for electric car

Forum|Forum|10 months ago
May 18, 2025
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The $7500 tax credit on my 2023 return brought my total tax down to $2182. Turbo Tax said my estimated tax for 4/15/2024 was 1/4 of that or $546 so I paid that. In September for some reason I can't remember I figured out that my estimated tax each quarter should be $1300 so I paid that for the next 3 quarters but did not pay the amount needed to correct for not paying enough in June. Now the IRS has sent me a bill for that difference. My question is WHY was $1300 the correct amount. I am not a high earner so my estimated tax should be 100% of my previous years tax.

NCPERSON1

your post is a little confusing to me as it may be confusing the estimated tax with the actual tax. In the end all that matters is the actual tax.

1) on your 2024 tax return, what is on line 24? this is your total tax.

2) on your 2024 tax return, what is on line 33. These are the total payments you made to pay the tax listed on Line 24.

3) I will assume you correctly listed the estimated payments on Line 26. I would suggest reviewing this line against your records closely.

4) If Line 33 is more than Line 24, that determines the refund. If Line 33 is less than Line 24, that determines what you owe.

What you paid as 2024 estimated taxes is just a down payment against the tax, but it is important that it was listed correctly on Line 26. If you over reported this Line, then the "bottom line" of the tax return is incorrect and could cause the IRS to come back to you for the difference.

SueJohnsonAuthor

I did put the amount on my 2024 tax that I paid as wrong as I thought I had paid $1300 on all 4 estimated tax payments. I don't doubt I owe the difference. What I can't figure out is why the correct amount of estimated tax was $5200.

On my 2023 tax return

line 15 taxable income $111,623

line 16 tax $10,017

line 18 $10,017

line 20 $7,835 with is $7,500 from the electric car credit and $335 from foreign tax credit

line 22 $2,182

line 24 $2,182

NCPERSON1

@SueJohnson there really is no such thing as the 'correct' estimated tax. Rather, to avoid the underpayment penalties, the estimated payments have to be at least 90% of this years' tax liability (line 24) or 100% of last year's (again, line 24).

if you can't remember how you determined that $1300 in quarterly payments was better than the $546 Turbo Tax estimated, how are we supposed to figure it out!

at some point past year did you estimate your tax liability for 2024 to be $5200? What is on line 24 for tax year 2024?