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 notice CP128, why you received it, and how to handle an IRS CP128 notice with help from the tax experts at H&R Block.
Learn about IRS Notice CP87B, why you received it, and how to verify a dependent on your tax return. Get tax help from the tax experts at H&R Block.
For a limited time, qualifying taxpayers can pay nothing to file a 1040ez with a tax pro at H&R Block. Find out if you qualify and how you can pay nothing!
To set up an installment agreement for your business, the IRS may need to determine your business' ability to pay. Learn more from the experts at H&R Block.