Paying Federal estimated taxes

[Value Buy]

We retired last fall and have to pay estimated federal and state taxes next week for the first quarter.
We just used turbo tax to crunch the numbers, but I know it is totally wrong.
It has us paying more in state tax estimates than federal. Our income this year, will just be about 5% less than last year so I know our tax liability has to be close to last year's.
Would it simply be safe to pay estimated taxes based on 90% of 2014's tax liability and not worry about it?
There have been other discussions here talking about various programs for tax estimates, but I cannot find them.
Can anyone give me suggestions for other programs?
ty

[Deleted]

Apr 9, 2015 9:58:55 GMT -5 Value Buy said:

We retired last fall and have to pay estimated federal and state taxes next week for the first quarter.
We just used turbo tax to crunch the numbers, but I know it is totally wrong.
It has us paying more in state tax estimates than federal. Our income this year, will just be about 5% less than last year so I know our tax liability has to be close to last year's.
Would it simply be safe to pay estimated taxes based on 90% of 2014's tax liability and not worry about it?
There have been other discussions here talking about various programs for tax estimates, but I cannot find them.
Can anyone give me suggestions for other programs?

I'd go with the 90% "safe harbor".

In our case, our income for 2015 will decrease substantially since I retired a year ago.  I'm assuming that our Federal taxable Income will be the max to fill the 15% marginal tax bracket and have estimated accordingly for Federal.  (Our income will be DH's SS, a small pension plus investment income and if that comes out to less I'll do a Roth conversion for the rest.)  I used the State worksheet to estimate our state taxes for 2015.  It's a bit simplistic but the numbers are smaller so I don't care.

[phil5185]

We retired last fall and have to pay estimated federal and state taxes next week for the first quarter.
We just used turbo tax to crunch the numbers, but I know it is totally wrong.
It has us paying more in state tax estimates than federal.

What happens in your state if you don't pay 'estimates", just pay the total bill on April 15? Is there a law? Or a penalty? That's what we do. Like you, I use TT and I pay the Federal Quarterly Estimates, but none to the state. (Actually, I don't recall seeing a State Quarterly Est on TT.)
Or maybe TT is giving you an estimate for the entire 2015 bill?

[wvugurl26]

Turbo Tax will do quarterly estimates if your state has an underpayment penalty. It did them for my brother's return last night. Check into your state's safe harbor rules.

[Blonde Granny]

I thought ours was a little off this year also for the state tax portion. I know state taxes are high here, but to be almost equal to Federal seems a bit strange. Oh well, it's not going to break the bank to pay the quarterly payments but it does irritate the devil out of me after living in Florida for so many years. This state income tax and personal property tax causes my blood pressure to rise every time I think about those two things.

[billisonboard]

Apr 9, 2015 11:13:40 GMT -5 phil5185 said:

We retired last fall and have to pay estimated federal and state taxes next week for the first quarter.
We just used turbo tax to crunch the numbers, but I know it is totally wrong.
It has us paying more in state tax estimates than federal.

What happens in your state if you don't pay 'estimates", just pay the total bill on April 15? Is there a law? Or a penalty? That's what we do. Like you, I use TT and I pay the Federal Quarterly Estimates, but none to the state. (Actually, I don't recall seeing a State Quarterly Est on TT.)
Or maybe TT is giving you an estimate for the entire 2015 bill?

For a couple of years, TT told me I should send in money quarterly because I had to sent in a big check with a little bit of penalty money. They even set up for me to print out little slips to send with the quarterly payments. I didn't do it the first year. Again sent a significant (to me) sized check the next year. Got the "you need to send money quarterly" slips. Didn't use them. I did increase my withholding and will be sending a smaller check this year. No little slips from TT this year.

[milee]

Apr 9, 2015 10:15:52 GMT -5 @athena53 said:

Apr 9, 2015 9:58:55 GMT -5 Value Buy said:

We retired last fall and have to pay estimated federal and state taxes next week for the first quarter.
We just used turbo tax to crunch the numbers, but I know it is totally wrong.
It has us paying more in state tax estimates than federal. Our income this year, will just be about 5% less than last year so I know our tax liability has to be close to last year's.
Would it simply be safe to pay estimated taxes based on 90% of 2014's tax liability and not worry about it?
There have been other discussions here talking about various programs for tax estimates, but I cannot find them.
Can anyone give me suggestions for other programs?

I'd go with the 90% "safe harbor".

Not sure what tax bracket VB is in, but the safe harbor % is higher for higher earners. If your income is more than $150k MFJ or $75k MFS, the safe harbor is 110% of the 2014 return amount.

[Value Buy]

Apr 9, 2015 13:47:06 GMT -5 milee said:

Apr 9, 2015 10:15:52 GMT -5 @athena53 said:

I'd go with the 90% "safe harbor".

Not sure what tax bracket VB is in, but the safe harbor % is higher for higher earners. If your income is more than $150k MFJ or $75k MFS, the safe harbor is 110% of the 2014 return amount.

We will not make the $150,000 level in retirement.
Since most of our investments are joint ownership, I assume we will file jointly

[Value Buy]

Apr 9, 2015 11:13:40 GMT -5 phil5185 said:

We retired last fall and have to pay estimated federal and state taxes next week for the first quarter.
We just used turbo tax to crunch the numbers, but I know it is totally wrong.
It has us paying more in state tax estimates than federal.

What happens in your state if you don't pay 'estimates", just pay the total bill on April 15? Is there a law? Or a penalty? That's what we do. Like you, I use TT and I pay the Federal Quarterly Estimates, but none to the state. (Actually, I don't recall seeing a State Quarterly Est on TT.)
Or maybe TT is giving you an estimate for the entire 2015 bill?

Indiana does require quarterly payments.
We have owed the state money at the end of the year for five years now, as our dividends have climbed due to reinvestment of shares even with extra with holding.
Now retired with no salary the witholdings are required to be paid quarterly.
Turbo Tax kicked out quarterly estimates for both the state and federal returns, but for some reason TT figures I owe the state more than I do the Feds.
Our state tax last year was about 27% of what we paid for the federal taxes.

We are sending checks for 2014 taxes in the mail tomorrow and will set up electronic payments for this year's quarterly estimates.