Q. I completed my 2019 taxes early and estimated my tax obligation for 2020, and I sent the first 2020 quarterly payment into IRS. Because of the 2020 waiver of Required Minimum Distributions, I now want to reduce the amount of the next quarterly payments because of a lower estimated taxable income. Given that I sent one payment in, can I reduce future quarterly payments without incurring a penalty for not maintaining consistent quarterly payments?
— Trying to make it right
A. Yes, you can reduce your payments.
As a taxpayer you are not obligated to make equal estimated payments throughout the year, said Matthew DeFelice, a certified financial planner with U.S. Financial Services in Fairfield.
He said technically, estimated taxes are meant to be paid based on what you owe for that particular quarter.
“You can simply calculate what you think you will owe this year assuming you waive your 2020 Required Minimum Distribution, subtract out what you’ve already paid in for the first quarter, and divide the balance by three,” he said. “You can then use that number to make your remaining estimated tax payments for the year.”
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Karin Price Mueller writes the Bamboozled column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com’s weekly e-newsletter.
Go to the news source: I overpaid my estimated taxes. What do I do next?