I need to estimate tax liability because I know I have a balance due and owe taxes. How do I estimate extension tax liability?
To estimate your taxes due/balance owed, you can do either of these:
- Use the estimated tax worksheet in the instructions for Form 1040-ES. Use Line 13c as your estimated taxes due/balance owed on your extension as filed on Form 4868.
- Complete your return with the actual figures you have and estimate figures for those that you don’t. Use the amount of tax due on the return as your estimated taxes due/balance owed. Make sure you replace all of your estimates with actual figures before filing your return.
When you eventually file your return:
- You’ll receive a refund for any tax you overpaid.
- If you underpaid and owe tax, the remaining balance owed amount will be subject to interest and penalties.
Do you need more time to file taxes? Review these time-sensitive tax pro tips to prepare for the tax filing extension deadline. Read more from our pros on the H&R Block blog.
Inheritance tax is the tax you pay as the beneficiary of property that you inherited and then you sell. Learn more from the tax experts at H&R Block.
The Taxpayer Advocate Service is requesting information from you. Learn more about IRS letter 2904 from the tax experts at H&R Block.
The discrepancy between your name and your Taxpayer Identification Number has been corrected. Learn more from the tax experts at H&R Block.