"Ernie Klein" <ecklein[at]pacbell.net> wrote
- quote -

The only thing I can conclude from that is some expiring tax
credits or something that will be happening in 2006 to
increase the taxes (given similar incomes).

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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L K Williams wrote:

- quote -

True, in the main. However, they do routinely monitor
estimated payments by professional subject to circular 230.

You can run, but you can't hide.

ChEAr$,
Harlan

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Andrey Tarasevich <andreytarasevich[at]hotmail.com> wrote:

- quote -

You should know that IRS does not routinely monitor
estimated tax payments. The only times that I know of are
when you are negotiating a payment schedule or offer in
compromise. Otherwise, IRS just looks at the end result
when you file your return for the year -- if you paid
enough, OK; if not, then you owe a penalty.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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Barry Margolin wrote:
- quote -

I have a simular situation and hope someone could help me
out on it.

I completed my taxes today and I also am getting a refund.
We are self-employed and did not pay any estimated taxes in
2005. The last 5 years we have always owed something
between $1000-3000. The difference in '05 is a big decrease
in our income.

I am wanting to know if it's possible to get a refund even
though no taxes were paid in? We double checked the forms
several times and the only place that could be questioned is
the "earned income credit" and "additional child tax credit"
which are the two that led us to a refund. We had gotten
those two credits in years past so I am assuming all is
correct. It's just amazing to get a refund without paying
in.

Thanks!

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"Paul Thomas, CPA" <paulthomascpapc[at]bellsouth.net> wrote:
- quote -

I don't know if that is the case. I have been using TT
forever (_not_ the online version though). This year my
taxes ran OK, my daughter #1 return ran OK, but for some
reason daughter #2 return insisted on printing estimated
state (not federal) vouchers for $83/quarter even thought
she was to receive a (very) small state refund.

I double and triple checked the numbers and the sanity of
the numbers on the return and all were good. I don't know
why or what triggered TT to print those estimated tax
vouchers, but since the return itself was OK, I don't intend
to spend any time or effort to figure out the source of the
glitch since I am done with taxes for this year. I will
merely note that it occurred.

- quote -

That is true of course, but when the software prints out
totally unexpected and clearly incorrect estimated tax
vouchers, one cannot wonder if there is an error somewhere
on the return that caused the vouchers to print, or a
software error that may cause other incorrect calculations
on the return.

I for one don't like to ignore unexpected output from
software -- it may result in errors that effect more than
just the printing of the unexpected forms. However in my
case, the input was fine. It appears to be a minor software
issue.

Like I said, I don't use the online version but I would
guess that they are both based on the same engine.

--
-Ernie-

"There are only two kinds of computer users -- those who have
suffered a catastrophic hard drive failure, and those who will."

Have you done your backup today?

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Andrey Tarasevich <andreytarasevich[at]hotmail.com> wrote:

- quote -

My guess is that you entered incorrect information about the
number of allowances you're claiming on your 2006 W-4, so it
thinks you aren't withholding enough from your paychecks.
There's probably a worksheet that shows what it has computed
as your estimated total tax and withholdings in 2006.

Also, did you have significant capital losses in 2005?
Maybe TT assumes capital gains and losses are one-time
events, so it doesn't include similar adjustments in its
2006 estimate.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***

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The "glitch" is called GIGO and hapens all the time with TT
and other tax programs. They just don't understand that
their user misintrprets their question. I would *suspect*
that you told them the amount of your withholding under
their question about what installment payments you made.

If you did not pay installments and you got a withholding
refund you *obviously* don't need their 1040 ES vouchers.
Just thow them away. The IRS isn't expecting any estimated
payments from you.

This is a strange year where if you are subject to AMT you
will most probably underwithhold if you leave everything "as
is". So, just make sure your 2006 withholding is as much as
your 2005 taxes (110% if your AGI in 2005 was over $150K),
or within 90% or $1,000 of what your actual (not estimated)
taxes will be in 2006.

ed

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"Andrey Tarasevich" <andreytarasevich[at]hotmail.com> wrote

- quote -

You must have told the program something for it to believe
that you will need to make estimated tax payments.

But, the software isn't the law, nor is it the government.
So, feel free to not pay what the software recommends if you
are confident that there will not be any additional income
or reduction of expenses / deductions in 2006.

No one in the government is going to know that you are not
making estimates, or even know that your software suggested
that you make them.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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I recently finished preparing my taxes using TurboTax
online. I get a federal refund of about $1200 for 2005.
However, TurboTax prepared quarterly estimated tax vouchers
for 2006, according to which I have to pay about $2000 of
estimated tax every quarter (!!!). I didn't pay any
estimated taxes in 2005. How is that possible that I have to
pay it in 2006??? Moreover, about $8000 seems to be an
overkill. This doesn't seem to make any sense. Could it be
some kind of glitch in TurboTax? I don't expect anything to
change in 2006, i.e. I'd again expect the same federal
refund in 2006 without paying any estimated taxes in
advance. Why on Earth could TurboTax decide that I have to
do it? And how mandatory is it under these circumstances?

--
Best regards,
Andrey Tarasevich

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