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.
Learn more about letter 3572, why you received it, and how to handle an IRS audit with help from the tax experts at H&R Block.
Can you file your taxes if your Form 1099-INT is missing? Learn more from the tax experts at H&R Block.
How do you avoid an underpayment tax penalty? Learn more about underpaying estimated taxes and get tax answers at H&R Block.
The IRS thinks you may owe Alternative Minimum Tax (AMT). Learn more about IRS letter 2194 from the tax experts at H&R Block.