Applying refund to estimated tax payments

[dkh]

Client wants refund applied to first estimate then balance refunded.  My thinking is June 15 is first estimate that is due so apply refund there. Let client pay what's normally due April 15 on July 15.  I can make ProSeries do this by overriding Overpayment Applied on voucher 1 on Estimated Tax Worksheet. Is there any harm in doing this ?   I'm tired and worried my judgement is slipping.

[rbynaker]

We have yet to really see how the math might play out on a 2020 Form 2210.  Gut answer, you're probably okay, but does 30 days really make much of a difference?

Estimate coupons are really just a convenient way for the IRS to know how to apply a payment.  The penalty should inevitably be based on actual payment dates.  So any overpayment from 2019 should be deemed to have been paid on 1/1/20.  Back before the federal government started messing with the space-time continuum, all that mattered was "paid by 4/15/xx."  Now, whether that's "paid by 6/15" or "paid by 7/15", who knows.

My own personal opinion is that 2Q ES payments made by 7/15 will be fine once the dust settles.  A technical reading of the disaster area emergency powers suggests that the IRS is simply granting a grace period for payment so I think any payment made by 7/15 will be deemed to have been made on 4/15.  In the grand scheme of things though, I also don't think 30 days is going to make a difference.  Folks that have the money should just pay it by 6/15 and not risk the uncertainty of how the math ends up working on the 2210.  Folks that don't have the money on 6/15 are not likely to have it by 7/15 either.  IRS interest is cheap compared to credit card interest, so if you don't have it, don't pay it.  Food, health and shelter come first before making a deposit into the IRS non-interest bearing savings account.

I also would not be surprised to see a 2210 waiver similar to what we had in 2018 whereby as long as you paid in 85% of your tax by 1/15/21, no penalty.  I wouldn't bet the farm on it, but that's what I'm seeing in the crystal ball.  Come back in 9 months and see how completely off-base I am. 🙂  Wait, what am I saying?  The IRS still has forms in draft for 2018, better make that 19 months.

Rick

[dkh]

What I was trying to ask -  is having the program apply 2019 refund to 2020 voucher 2 (due June15) rather than 2020 voucher 1 (due Jul 15) reasonable thinking.  Client can then have until July to pay voucher 1.    All vouchers are paid on time so no penalties should apply next year.  But I do have to do an override in program to make this happen.

[qbteachmt]

Vouchers to help your client to keep track and to flag the IRS to apply physical payments or Online payments through EFTPS to the right Period.

The vouchers are pretty much moot, when this is Pay by Keeping my overage. The return Filing Date is when the IRS considers they have the amount to apply, because you stated on the return to apply to the next tax year.

And of course, the IRS cannot apply anything to "June" if the return is not even filed until July. The whole point of "let it ride" = Hey, I've already partially paid for the new year. So, either you Filed, and there were funds credited; or, you have not yet filed, so you need to make a payment in consideration that the IRS wants some money sooner.

[dkh]

I see what you're saying.  In this case, the return will be filed by June 15 because client is only having a portion of overpayment applied and the balance refunded.   All will be good.     Thanks.

[qbteachmt]

"In this case, the return will be filed by June 15"

I would take that route as the safe bet.