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Bills1982
Level 1

Large income tax refund. Paying too much in estimated taxes?

Hello all,

I use QB Self Employed and TurboTax Self Employed.

I have finished our income taxes for 2018, and have a very large refund.  It seems to me no matter how well I set up my Tax Profile in QBSE, it must be inaccurate.

 

For all of 2018, it had me paying ~34% of my taxable profit to Quarterly Estimated taxes.  With this large refund, my calculation is that I probably should have been paying closer to ~24% of my taxable profit to break even on our end of year taxes.  10% less.  

 

My wife is a W2 employee of another company and I have entered that information as accurately as I can in the QBSE Tax Profile.  I enter her FIT taxable wage and the amount of FI Taxes she is paying (excluding SS and MC).  The net income projection for 2018 was pretty much spot on for the entire year.  I keep very good records of everything and we only take the Standard Deduction on our annual taxes.  To play with the estimated tax calculator in QBSE, I have entered the Standard Deduction, plus all of our child, property tax, and mortgage tax credits, just to see how it adjusted things, but it still wants me to pay ~31% for 2019.

 

In the first quarter of 2019, I am going to do the 1040-ES by hand to see if it comes out different than QBSE is saying, but I am wondering, has anyone else experienced this?  Is the calculator in QBSE just broken or am I entering things wrong?  Any suggestions and expertise are welcome!

 

Thank you.

1 Comment
Rustler
Level 15

Large income tax refund. Paying too much in estimated taxes?


@Bills1982 wrote:

In the first quarter of 2019, I am going to do the 1040-ES by hand to see if it comes out different than QBSE is saying, but I am wondering, has anyone else experienced this?  Is the calculator in QBSE just broken or am I entering things wrong?  Any suggestions and expertise are welcome!

 

Thank you.


I tried the estimated tax calculator long ago and with my situation it was way off when compared to my manual estimated tax work up - I think it is situation dependent though, either that or there a lot of folks not saying anything.

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