How to apply a refund to next year's estimated individual return in Lacerte

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Follow these steps to apply an overpayment to estimated tax:

1. Go to Screen 7, 2024 Estimates (1040-ES, W-4, W-4P).
2. In the field Apply overpayment to 2024 select the option to indicate how you want the refund to be applied.
   

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To apply the entire payment:

• Choose Option 4, Apply consecutively to all qtrs, refund excess, to apply to the first quarter first and any remainder to be applied to each consecutive quarter to reduce the estimate.

Or:

• Choose Option 5, Apply evenly to all quarters, refund excess, to apply an even amount to each quarter to reduce the payment ($1,000 overpayment = $250 applied to each quarter).

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To apply a partial overpayment and refund the excess:

1. Enter the dollar amount that is to be applied to the estimates.
2. This amount will show on Form 1040, Line 34 and the remainder will be refunded.

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To apply overpayment when no estimates are generating:

1. Choose Option 7:  Apply entire refund, no estimates from the dropdown menu or enter the dollar amount to be applied.

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If an amount entered isn't flowing to Form 1040, Line 34:

If an amount is entered in Screen 7.1, 2024 Estimates (1040 ES) on the line Apply overpayment to 2024 and it isn't flowing to Line 34 of the return:

1. Make sure the taxpayer isn't listed as deceased because a date is entered in the Date of Death field on Screen 1).
2. Check if there are still estimates due that are equal to the overpayment being applied. This can happen later in the year, when several payments have already been made and the remainder of the estimates don't equal the amount that they want to have applied.
   • For example: Joe Smith owes $12,000 in estimates. He is receiving a refund this year of $5,000 and wants to apply $3,500 to next year. However, he's filing his return on Oct. 7 on extension.  He paid all of his taxes on time by April 15.  He's made his 1st, 2nd and 3rd quarter estimated tax payments on time, of $3,000 each. He has $3,000 in estimates left to be paid this year. If he'd done this in April, or even August, the program would have let him because he would have owed more than $3,500 in estimates. Now, he only owes $3,000. To make the overpayment $3,500, he'll need to either increase the amount of the final estimate, or reduce the amount of the overpayment.

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To reduce the amount of the overpayment:

1. Go to Screen 7, 2024 Estimates (1040-ES, W-4, W-4P).
2. Reduce the amount on the line Apply overpayment to 2024 to the amount of the estimate or less.

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To increase the amount of the final estimate:

1. Go to Screen 7, 2024 Estimates (1040-ES, W-4, W-4P).
2. Scroll to the section Overrides. 
3. In the line 4th quarter [O], enter the increased amount to equal the amount of the overpayment to be applied.

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Apply individual return overpayment to next year and create one estimated tax voucher

1. Go to Screen 7, 2017 Estimates (1040 ES).
2. Locate the General Information section.
3. Enter the amount of the overpayment as a dollar amount in the field, Apply overpayment to 2017 (Ctrl+T or dollar amount) (code 13).
4. Enter '1' in the field, One voucher only: 1=1st, 2=2nd, 3=3rd, 4=4th (code 17).
5. Select Overrides in the Section box on the left side of the screen.
6. Enter the desired amount in the field, 1st quarter [O] (code 33).
7. Enter '-1' in the 2nd quarter [O], 3rd quarter [O] and 4th quarter [O] fields.
8. Check the box next to Do not reduce override by overpayment applied.
9. Enter the same amount entered in the field, 1st quarter [O] in the field, 2017 estimated tax [O] (code 37).

Note: Prior year input will be the same, tax year identifiers will differ within each program.

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