How to fix Estimate Tax Worksheet number?

[Jaye]

12c number should be the smaller of line 12a or 12b.

But the bigger number(12b) was auto selected, resulting in Estimate

How can I fix it?

[itonewbie · Accepted solution]

That's because you've overridden the option for Payments & Penalties > 2021 Estimated Tax (1040-ES) > Estimate options [O] with option 3=Greater of 90% of 2021 or 100/110% of 2020 tax.  The one you should select is 2=Lesser of 90% of 2021 or 100/110% of 2020 tax.  I'm assuming you are pretty certain your client will have a lower liability this year.

[itonewbie]

Given the uncertainties around tax law changes, adjustments for future installments may be necessary if you really don't want to use the ol' trusted prior year exception.

[Jaye]

Thank you for your advice.

I fixed the federal option to 2=Lesser of 90% of 2021 or 100/110% of 2020 tax and if fixed!!! 

Yes, I'm quite certain my client would not need estimated tax payment because he set much higher withholding amount from his W2 this year.

May I ask what is the right option for CA?

And what is "the ol' trusted prior year exception"?

[itonewbie]

Prior year exception is 100/110% of 2020 tax.

CA works the same way as federal but you can't use prior year exception if your client wasn't a FY CA resident.

[taxprepp]

I have a state return I am doing, and this was great information!

[Jaye]

Thank you! I appreciate your help!!!

[itonewbie]

NP, @Jaye and @taxprepp!