NJ Estimated Tax payments for Q2 2024 did not process through clients bank accounts, not sure why that did not happen when I set up the payments for automatic processing. Q1 processed fine!

[Larojo]

Two clients NJ estimated tax payments for 2024 did not process through the clients' bank accounts on June 17 and are now delinquent, had one client pay via direct deposit tax payment via NJ website, other client is not willing to deposit, requesting that I use the software to process the payment.  Not sure what I did incorrectly when I set these payments up in Pro Series months ago.  Please advise what I need to do to process Q3 and Q4 automatically.

Thank you.

[Just-Lisa-Now- · Accepted solution]

Is NJ one of those states that YOU have to initiate the ES? It looks like thats what it says.   I think NY is like that, but I have no experience with the east coast states, so no clue how it really works

[GodFather]

One of my clients also did not have their 2nd estimate pulled.  Looking at Lisa's response, it seems crazy that we would need to e-file each estimate separately but appreciate her posting that.  I'll need to investigate this further. 

[Larojo]

Yes exactly what has to happen, went in to the Electronic transfer tab, selected the return and then selected transmit and the Q2 payment was there to transmit, received acknowledgment from NJ that return I.e. NJ -1040 ES 2024 was accepted. Refreshed the page and Q3 is now there to send in September. Must have missed the training on this one, my fault!!

[Larojo]

Yes understand that now, thank you 

[BobKamman]

So not only must you check on whether the client is still alive and has the same bank account each quarter, but the client must rely on you being available each time a payment has to be made.  I'm so old, I can remember when taxpayers were able to make their own stinkin' tax payments.  

[ljr]

agreed, I'm not going to track them down each quarter - I can give you payment vouchers and you can decide to mail them or go online and make your own payment. 

[GodFather]

Can you populate the fields now and efile, indicating they be pulled on the actual due date??

[Larojo]

Agree, too many touch points but clients do not want to bother with sending in quarterly estimates they would rather it be automated.

[Larojo]

Yes you need to go into the estimated tax worksheet and provide the amount for the quarter and ensure you mark off (X) the next payment date, save to client then go to EF tab, select client, efile tab, transmit, and you will see the Q3 estimated payment and you can select that payment and follow the normal efile steps.

[BobKamman]

Just out of curiosity, how much NJ tax is this client paying this year?  The Corruption Capital of the Country still requires ES payments if the amount is as low as $400.  I think they got that from IRS, before the federal requirement was raised a couple decades ago.  It probably costs them more to process those $100 payments, than it does for them to borrow short-term against April collections.  

And is the client making the payments from a checking account that pays no interest and has an average balance of $20,000?  There is no law against making all four payments in April of the current year.  Even if the ES tax is $1,000 and he is earning 5% on a money-market account, he would forego only $25 or so interest by paying all at once.  That might be $15, after taxes.  And you're going to hold his hand all year for free, just so he feels better about it?  

[sjrcpa]

Even though the NJ estimates are separate efilings, can't you  transmit them all at the same time you transmit the actual tax return?

You can do this with MD (except I don't know about ProSeries).

[Larojo]

That is exactly what I tried to do by setting up each quarter to pay on the due dates, that did not happen automatically. Only on the NJ State 1040 ES , Federal 1040 ES processed automatically. You have to manually process each quarter’s payment separately.

[Larojo]

Each of my clients are 100 % 1099 sole proprietors with varying levels of income that is way above the $400 tax for NJ minimum. I’ve experienced that NJ has come back charging interest when the income was higher in certain quarters and the quarterly payment was underestimated.

Income that year exceeded $200k so it was easy for NJ to select it for audit, and I suspect that’s how they assessed interest!