Taxpayer owes $8,000, has to make payments in 2019 for liability but cant pay the calculated quarterly payment. Where can I reduce the payments to meet her ability to pay

Forum|Forum|6 years ago
December 7, 2019
3 replies
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ProSeries Professional

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Best answer by IRonMaN

In the estimated tax worksheet, there is a box to enter the total estimates you want to have paid. Enter an amount and click the box, and you are in business.

IRonMaNAnswer

Level 15

In the estimated tax worksheet, there is a box to enter the total estimates you want to have paid. Enter an amount and click the box, and you are in business.

Slava Ukraini!

J

jennifersue444Author

Level 2

Is the IRS ok with you setting the amount you want to pay each quarter? If she wanted to only pay $100 a quarter due to a hardship could she do that or does she have to call IRS for approval to set how much she can pay a quarter?

itonewbie

Level 15

"Taxpayer owes $8,000, has to make payments in 2019 for liability but cant pay the calculated quarterly payment."

Tax liability for 2018 return and 2019 ES-tax are two different things. If she has difficulty settling the balance from her 2018 return, she could consider applying to pay that by installments but interest and late payment penalty will continue to accrue.

If she is expected not to have sufficient withholdings to cover the minimum ES-tax payment required but does not make the quarterly payments on a timely basis, she would, unfortunately, be subject to ES-tax penalty. She should aim to pay what she can, even if late, to mitigate that. Another possibility is to use the annualization method to compute her ES-tax penalty if her income is not earned ratably through the year.

Given the amount she owes and inability to pay, it doesn't sound like the balance due is from personal income. It may be a case of her not having enough withheld because she over-claimed her allowances on the W-4? You may like to help her find the root cause and lessen the impact next year.

---------------------------------------------------------------------------------Still an AllStar

IRonMaN

Level 15

I had two different clients over the years repeatedly tell me that they couldn't afford to pay estimates. They couldn't come up with the cash to pay estimates but every year they could come up with the cash to pay the balance due at the end of the year ------ go figure.

Slava Ukraini!

qbteachmt

Level 15

You can Estimate what 2019 will look like and calculate the quarterly estimates. This isn't Fact: "Aside from the penalty she owes a lot and her normal income cant pay what proseries is calculating her payments each quarter in 2019"

It's using the reference data from the 2018 tax preparation. If 2019 will be significantly different, you help the client by figuring out their most likely requirement for 2019 estimates.

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