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My income reduced at the end of the year, I overpaid my first three tax estimates. Do i need to pay my 4th tax estimate if i do not owe anything more for the year?

Forum|Forum|6 years ago
June 1, 2019
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Best answer by PatriciaV

No, if you believe you have paid enough taxes to cover your tax liability for the year, you are not required to make a final estimated tax payment.

You might review the rules first:

According to the IRS:

"If you did not pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. There are special rules for farmers and fishermen. Please refer to Publication 505, Tax Withholding and Estimated Tax, for additional information."

PatriciaVAnswer

No, if you believe you have paid enough taxes to cover your tax liability for the year, you are not required to make a final estimated tax payment.

You might review the rules first:

According to the IRS:

"If you did not pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller. There are special rules for farmers and fishermen. Please refer to Publication 505, Tax Withholding and Estimated Tax, for additional information."

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Carl11_2

I had that happen to me this year. If I'd have realized how much business was going to slow down in the last quarter, I wouldn't have sent in a 3rd quarter payment either. So for 2015 not only did I not send a 4th quarter payment, but a preliminary run-through of my taxes indicates that I will be getting all of my 3rd quarter payment refunded to me.