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.
Need help deciding if you need to file an amended return (IRS Form 1040X)? Get the facts from the tax experts at H&R Block.
Donating a qualified vehicle to a charity? Learn how Form 1098-C is used to report the details of your donation and how it affects your deduction.
Learn more about your options to reduce or remove an IRS estimated tax penalty. Get the facts from the tax experts at H&R Block.