Do I need to pay estimated tax?

jfe

On my 2023, We owed $902 which was to repay PTC for ACA. We did not owe any other Federal income tax. In October of 2024, we did a Roth conversion of $15,000 and did not have any tax deducted. We expect to owe approx $2,300 tax for 2024. Do we need to make an estimated payment or are ok considering we owed less than $1,000 last year?

PhillipB

Hello,

The general rule is that you should pay estimated taxes if you expect to owe more than 1,000 dollars on your next tax return. Since you expect to owe 2,300 dollars, you have an estimated tax payment requirement. However, the choice to pay estimated taxes is yours. The penalty is usually not too high, and many people would prefer keeping the money in their bank account until 4/15 despite the potential penalty.

Let us know if there are additional questions or concerns.