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.
If you’ve received unemployment compensation or a state tax refund, you’ll receive Form 1099-G. Learn more about Form 1099-G and how it affects your taxes.
The IRS made a change to the Making Work Pay and/or Government Retiree Credit on your tax return. Learn more about IRS notice CP12M from H&R Block.
Learn about the consequences you can face if you lie on your tax return. Get the facts from the tax experts at H&R Block.
If you did not have health care coverage, you may need to calculate your shared responsibility payment when filing your return. Learn more from H&R Block.