chaser123

Thats a tricky one. IRS will take your money and credit appropiatly, no matter when you pay. You might raise a flag because you are past the estimated pay deadline. If you you do not have penalty for underpayment, I don't think their is an issue. If it was mee, I would pay 30,000 (or CC max) today with an extension to file and file a final next week asking for a refund.

Stgermainparis

I don't file quarterly taxes (and I don't think an underpayment penalty...I'll double check). This is just my regular return due Apr 15 (most taxes taken from paycheck). LOL re the 30k and refund later! Except I don't want to pay the 1.87% on that. Or maybe you meant 3k. I'd rather just wait, I think, than fuss with the refund. Don't want $ hung up that long by IRS. Just doing this to meet minimum spend on amex plat biz.

tuphat

Just so everyone knows how federal estimated taxes work --

By Jan 15, 2017, you are supposed to have either paid (via withholding or ES payment) either (i) 90% of the tax that will be shown on your 2016 return, or (ii) 100% (110% in some cases) of the tax shown on your 2015 return.

There are various exceptions, etc. to the above. There are also rules about how the payments are supposed to be made during the tax year, e.g., quarterly pro rata, unless an exception applies.

ETA: if you don't meet (i) or (ii) above, penalty is also waived if the underpayment is $1,000 or less

Stgermainparis

That's actually helpful information. I'm at >90%, so I think ok. But good to know. And I think I'll just wait to make the payment when I finished and filed so that no problems. Less stress.

Steve M

No problem. Just pay it as a 2016 Estimated Tax payment.


No, this will not raise a red flag. The only issue of paying Estimated Taxes late is if you actually owed estimated taxes (see quote from tuphat below). In that case, IRS and your tax prep software will make a calculation as to the late payment penalties and interest owed. Otherwise, it's just an extra tax payment credited to your account. It happens all of the time: people pay estimated taxes late for whatever reason, and then end up not owing as much as they thought they should send in (hence the "estimated" in the name).


There is no such thing as "filing quarterly taxes" other than making the Estimated Tax payment. You just put your name, address, SSN, and amount you're paying on a payment voucher. That's exactly what will happen if you make an Estimated Tax payment for 2016, even though the last payment was due on Jan 15.

At some point, the online tax payment services will switch over to having only 2017 Estimated Tax payments available. For example, if we were having this discussion on April 1, I would guess from experience that it will be too late to make a 2016 Estimated Tax payment, and only 2017 Estimated Tax will be available. In that case, if you needed to make a tax payment that day not not wait until your return was filed (even if you plan to do so by April 15), then you can file Form 4868 - Application for Automatic Extension of Time To File. Even if you don't plan on filing past the normal deadline, filing for the extension gives you a mechanism of paying 2016 taxes without needing to know the exact amount due. Unlike Estimate Tax payments, you do need to state an estimate for the total amount you expect to owe in taxes for 2016, and thus you pay that amount, less all taxes paid or withheld so far. But by doing so, you can pay some or all of the taxes due online after the Estimated Tax payments are no longer accepted but before you file. And once you've done that, there's nothing to prevent you from filing on or before the original deadline anyway, and making your final payment at that time if needed.

tuphat

Maybe OT but --

Withheld taxes (as opposed to estimated payments) have a particular "magic" in the sense that regardless of WHEN during the year the dollars were withheld, all the withheld taxes are effectively credited to your account as of the BEGINNING of the year. This is important if you are facing a penalty for underpayment of estimated tax.

An extreme example: Say your tax liability for the year is $100k. Normally, you would have to pay $25k per quarter [ETA: actually 90% * 25 = $22.5 ] during the year, or face a penalty. Alternatively, you could have de minimis amounts withheld from your paycheck for Jan -Nov, then $100k withheld from your Dec paycheck. All of the withholding for the year is considered to have been paid in Jan, thereby eliminating any estimated tax penalty.

trouble747

Quick question: If one pre-pays some amount of tax (but actually expects a refund), does that tax payment need to be noted on the 1040 somewhere (in addition to withholding reflected on your W2, for example)?

*edit*

(By prepay I mean through one of these credit card services.)

GetawaysRus

I use TurboTax. During the course of the interview, TurboTax collects data from W-2 forms. I also pay quarterly estimates, and during the course of the interview TT also collects all data on the estimates I have paid. In addition, TT tracks any Federal tax overpayment from the prior year that is carried forward rather than refunded to you.

I pulled out my 2015 tax return. For 2015, all of that data was summed and placed on Lines 64 and 65 of the "Payments" section of Form 1040. Line 64 captures W-2 and 1099 forms. Line 65 captures estimated tax payments plus any carry forward from the previous year.

I would expect that other tax software programs work similarly.

tuphat

Said a slightly different way --

Show total 2016 income tax withheld from Forms W-2, 1099, etc. on line 64.

Show total 2016 estimated tax payments, plus overpayment amount applied from 2015 return on line 65.

Show any amount paid with request for extension to file the 2016 return on line 70.

jwgmaldives

I was just looking over Pay1040's paybyphone option and it appears to be automated and not with a live person. Before I spend 30 minutes on hold, can someone let me know if split payment is available through automated phone line? Thanks!

cheaptimesharetraveler

Having a credit card like Cap One Venture, you get 2% cash back, which you can use as a purchase eraser. So use it to pay taxes, use the cash back eraser for some small purchase. Then you actually benefit a bit.

The Chase Sapphire Reserve is not a bad card to use for taxes. $10K in income taxes = $150 in the UR portal, but 10K miles is worth about $170 in SW airfare. I wouldn't do that, I would use my 2% cash-back card.

Gitangali

I use tax act, do I have to use their service to pay the taxes by CC or I can use Pay1040?

jwgmaldives

If I owed $6000, and my credit limit is only $5000, and I filed an amendment that found another $1000 of liability to bring the total owed to $7000. How would it work?

The first payment of $5000 would be for form 1040, that's not an issue.

But for the second payment of $2000, would that be for form 1040 (technically 1000 of that is), or for form 1040X?

Lumpylump76

It looks like PayUSATax detects Simon VGCs and reject them as debit. Has anyone used VGCs successfully there as debit, and what type of VGCs did you use? Thanks in advance!

chicagoflyer1976

I'm a W2 employee, generally get some refund. If I were to make a large payment ($20,000 or $30,000), and then get the money back in a refund, would that be possible, or cause any problems?