Paying Fed Estimated Tax for 2018 (new rates/brackets)

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MP123
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Joined: Thu Feb 16, 2017 3:32 pm

Paying Fed Estimated Tax for 2018 (new rates/brackets)

Post by MP123 » Thu Jan 04, 2018 6:48 pm

In the past I've paid 110% of the prior year's taxes for a safe harbor and then fine tuned as the year goes on if income was down a little.

With the new tax rates/brackets I expect our tax bill to be less but exactly how much less is hard to tell with certainty. Most of the online sites with tax calculators for 2018 I've seen are pretty rudimentary and don't differentiate between capital gains and regular income for example .

I assume the 110% safe harbor is still "safe" but will likely be overpaying a bit.

Does anyone know of tax software that models the new rates in moderately complex tax situations?

Ideally I'd like TurboTax 2018 but available right now :happy

kaneohe
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Re: Paying Fed Estimated Tax for 2018 (new rates/brackets)

Post by kaneohe » Thu Jan 04, 2018 7:06 pm

what other complexities besides LTCG/QDIV are you trying to model?

Ace1
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Location: Twinsburg Ohio

Re: Paying Fed Estimated Tax for 2018 (new rates/brackets)

Post by Ace1 » Thu Jan 04, 2018 8:30 pm

MP
Turbo Tax does have a next year tax estimator, although I would guess it wont
be really tuned in by a TT update until more defined rules for the new tax law are publicized.
I have not purchased the 2017 version yet to check it out, but it is a check box on the “what-if” form,
which lets you model current year or next year or mfj vs mfs, etc.
Its most likely the boxed cd version of TT had the old rules, but I’d bet it would be switched over by
a software update before too long. I can’t speak to the online version, because I don’t go there.
Another place to check would be on the intuit website to see if they have any info on when an update
for the new 2018 rules might be incorporated into the 2017 version.
Ace

Silk McCue
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Re: Paying Fed Estimated Tax for 2018 (new rates/brackets)

Post by Silk McCue » Thu Jan 04, 2018 9:10 pm

The TurboTax website states that they will be providing an update to TaxCaster to compare next years tax refund with this years. It’s stated on the following page.

https://turbotax.intuit.com/tax-reform

As you suggested, just paying what you would have paid without the new tax law may be overkill but at least you won’t spend unnecessary time thinking about it.

neilpilot
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Location: Memphis area

Re: Paying Fed Estimated Tax for 2018 (new rates/brackets)

Post by neilpilot » Thu Jan 04, 2018 9:14 pm

Silk McCue wrote:
Thu Jan 04, 2018 9:10 pm
The TurboTax website states that they will be providing an update to TaxCaster to compare next years tax refund with this years. It’s stated on the following page.

https://turbotax.intuit.com/tax-reform

As you suggested, just paying what you would have paid without the new tax law may be overkill but at least you won’t spend unnecessary time thinking about it.
Speaking of unnecessary time thinking about it.....1st Q estimated tax isn't due until mid-April. Just wait 2-3 months. I'm sure TT and other resources will be updated by then.

jebmke
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Re: Paying Fed Estimated Tax for 2018 (new rates/brackets)

Post by jebmke » Thu Jan 04, 2018 9:19 pm

Rate uncertainty isn't any different than income uncertainty. I normally set up EFTPS with the safe-harbor amount for three months and then fine tune it in December for the 4th payment (which could even be zero). If you think that there is a chance your tax bill will fall by more than 25% you could start with 100% as the baseline and then still true it up in December.
When you discover that you are riding a dead horse, the best strategy is to dismount.

scifilover
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Re: Paying Fed Estimated Tax for 2018 (new rates/brackets)

Post by scifilover » Fri Jan 05, 2018 8:36 am

Just looked at TurboTax What-if for 2017 version, and doesn't appear to have new tax law rates etc yet.

JDDS
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Re: Paying Fed Estimated Tax for 2018 (new rates/brackets)

Post by JDDS » Fri Jan 05, 2018 10:39 am

The capital gains brackets/rates are pretty much the same, so that may stay similar. The other brackets changing with all of the deduction changes makes that portion more complicated for sure. I have not seen a great online calc yet. For me, I have a basic spreadsheet I have already updated for my situation. Ironically I will itemize in 2017 for the first time, but likely not so long as the tax code stays like in 2018.

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