Minnesota

question everything

(49,084 posts) Mon Dec 11, 2023, 01:23 PM Dec 2023

Now I have to recalculate my remaining estimated tax

I thought I was ready with all the income and deductions and now that the tax rebate is Federally taxable it really increased our taxable income.

Federal government will tax Minnesota rebate checks

https://www.startribune.com/federal-government-will-tax-minnesota-rebate-checks-governor-tim-walz-irs-revenue/600324819/

For a difference of 13 days

The federal government ended the COVID health emergency May 11. Legislation authorizing the rebate checks was signed May 24. "Simply, it's not right," added Walz, who called the decision "bullshit."

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Now I have to recalculate my remaining estimated tax (Original Post) question everything Dec 2023 OP

You probably know about the safe harbors: progree Dec 2023 #1

Thanks. Have not made the last estimate, I usually do it around the middle of December question everything Dec 2023 #2

progree

(11,463 posts)

1. You probably know about the safe harbors:

Reply to question everything (Original post)

Mon Dec 11, 2023, 05:42 PM

Dec 2023

(#1#) If, during 2023 (including the January 15, 2024 payment) you pay in 100% (or more) of your 2022 taxes, then you are OK as far as estimated tax underpayment interest and penalty, no matter how high your 2023 income ends up being.

(#2#) The other safe harbor is paying 90% (or more) of your 2023 taxes during 2023 (including the January 15, 2024 payment)

Myself, I'm using the first safe harbor so I don't have to worry, as my estimated tax payments in 2023 (and Jan 15 2024) are already paid or auto-scheduled to be paid.

In a year when I use the 2nd safe harbor, as I do in some years, then yes, it sucks when I get a surprise extra income or extra "income" (quotes on the latter "income" when I do a Roth conversion or an IRA withdrawal larger than I had planned). Fortunately the surprises are mostly in December, so I have time to make a larger payment Jan 15 of the following month.

My income also varies quite a bit with dividends which are somewhat unpredictable... I just assume I'm going to get about 10% more dividends than the previous year, which is almost always an overestimate.

If I do sell something subject to capital gains tax, then, yup, I have to re-estimate estimated taxes if I'm using the 2nd safe harbor.

I'm not going to get any Minnesota tax rebate check because I had a bit more income and "income" than the limit, so I don't have that "surprise".

question everything

(49,084 posts)

2. Thanks. Have not made the last estimate, I usually do it around the middle of December