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Subject Author Date
TTax question speedlever 03-12-2008
---> Re: TTax question Wendell Watanab...03-12-2008
Posted by speedlever on March 12, 2008, 8:28 am
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 I've been running TT for years (and Quicken.) This year my printed returns
included form 1040-ES. I don't recall seeing this before and am not clear
why it did so. I don't pay estimated taxes as I am an employee.

My taxes are withheld from my paycheck (from several sources). I don't
recall having seen this before and am curious why TTax thinks I need to
make estimated tax payments. Any ideas?

Also, for whatever reason, I had to pay a $42 penalty for underpayment of
taxes for 2007, even though my taxes due were just a few hundred dollars
more than were due last year. Any idea what the threshhold is for this
penalty?

Finally, when I was finishing my return, I noticed that I am due a
*rebate*. I wonder why I couldn't apply this *rebate* to my taxes that I
have to pay?

The Fair Tax idea is becoming more and more appealing....




Posted by Oilcan on March 12, 2008, 9:49 am
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 Just a couple of thoughts - there really is not enough information to answer
why without going into your personal finances.

1) I don't pay estimated taxes as I am an employee.

Estimated taxes does not have anything to do with employment. It is used to
deposit funds to cover your potential taxes. This is one way you can cover
your taxes for non-employment income (i.e. investments).

2) I had to pay a $42 penalty for underpayment of taxes for 2007...

It basically looks at your taxes withheld and estimated at four points
during the year and compares income to that point. While your total taxes
might have changed only by a few hundred dollars over the course of the
year - you likely had a spike in your income at some point.

3) I wonder why I couldn't apply this *rebate* to my taxes that I have to
pay?

This was the way the law was written. As your elected officials.

Oilcan
"speedlever" <speedlever.at.yahoodotcom> wrote in message
> I've been running TT for years (and Quicken.) This year my printed returns
> included form 1040-ES. I don't recall seeing this before and am not clear
> why it did so. I don't pay estimated taxes as I am an employee.
>
> My taxes are withheld from my paycheck (from several sources). I don't
> recall having seen this before and am curious why TTax thinks I need to
> make estimated tax payments. Any ideas?
>
> Also, for whatever reason, I had to pay a $42 penalty for underpayment of
> taxes for 2007, even though my taxes due were just a few hundred dollars
> more than were due last year. Any idea what the threshhold is for this
> penalty?
>
> Finally, when I was finishing my return, I noticed that I am due a
> *rebate*. I wonder why I couldn't apply this *rebate* to my taxes that I
> have to pay?
>
> The Fair Tax idea is becoming more and more appealing....
>
>
>


Posted by Laura on March 12, 2008, 10:15 am
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"speedlever" <speedlever.at.yahoodotcom> wrote in message
> I've been running TT for years (and Quicken.) This year my printed returns
> included form 1040-ES. I don't recall seeing this before and am not clear
> why it did so. I don't pay estimated taxes as I am an employee.
>
> My taxes are withheld from my paycheck (from several sources). I don't
> recall having seen this before and am curious why TTax thinks I need to
> make estimated tax payments. Any ideas?

Do you have investments generating unearned income? Are you under
withholding on your paychecks? Both of these will trigger owing taxes at
year end. TT is probably designed to calculate estimated tax payments if you
owe money with your return. You might need to submit a new w-4 to your
employers if either is causing you to owe taxes.

> Also, for whatever reason, I had to pay a $42 penalty for underpayment of
> taxes for 2007, even though my taxes due were just a few hundred dollars
> more than were due last year. Any idea what the threshhold is for this
> penalty?
>
> Finally, when I was finishing my return, I noticed that I am due a
> *rebate*. I wonder why I couldn't apply this *rebate* to my taxes that I
> have to pay?
>
> The Fair Tax idea is becoming more and more appealing....
>
>
>


Posted by scott s. on March 12, 2008, 3:57 pm
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speedlever <speedlever.at.yahoodotcom> wrote in

> I've been running TT for years (and Quicken.) This year my printed
> returns included form 1040-ES. I don't recall seeing this before and
> am not clear why it did so. I don't pay estimated taxes as I am an
> employee.
>
> My taxes are withheld from my paycheck (from several sources). I
> don't recall having seen this before and am curious why TTax thinks
> I need to make estimated tax payments. Any ideas?
>
> Also, for whatever reason, I had to pay a $42 penalty for
> underpayment of taxes for 2007, even though my taxes due were just a
> few hundred dollars more than were due last year. Any idea what the
> threshhold is for this penalty?

Looks like you answered your own question. You didn't have enough
withheld in 2007, and TTax is trying to help you in 2008 by offering
the option to make estimated payments to make up your shortfall.
If you have a penalty from 2007 form 2210, you should go to the
estimated tax interview/worksheet in TTax. The info here is of
the "garbage in/garbage out" variety. TTax makes some assumptions
about your 2008 income and witholding/estimated payments that you
need to go through and update based on your best estimates.
There are various "safe harbor" methods of witholding and estimating
to avoid the penalty (such as paying 100% or 110% of 2007 tax liability
in 2008). The program will provide defaults but you need to do
"what if" drills to see what method works best (of course, you could
always put in a W-4 to increase your witholding).

I've found that if your situation is at all complicated (varying
income in particular) that TTax estimated tax worksheets are
insufficient. I use a spreadsheet program from an outfit called
edcosoft (NFI).

scott s.
.

Posted by Wendell Watanabe on March 12, 2008, 6:29 pm
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speedlever wrote:

[snip]

> Finally, when I was finishing my return, I noticed that I am due a
> *rebate*. I wonder why I couldn't apply this *rebate* to my taxes that I
> have to pay?

Others have answered your other questions, but this one is one I have
wondered about too. Seems like they could save on a lot of
printing/postage costs by not having to send out those rebate checks?

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