You can make an estimated payment at select 2021 Estimated Taxes from the reason wife and I will gross in the neighborhood of $478,000 in 2021. Likewise if you paid $8000 via withholding and owed another $1000, your tax liability was $9000. If you had $10,000 of withholding and got a $1000 refund, your liability was $9000. Remember that your tax liability is the overall amount you paid to the IRS last year. To avoid a penalty, you need to pay into the system (via estimated payments or withholding) at least 110% of your tax liability from last year.

You can be assessed a penalty for under-payment of withholding due to the lump sum that increases your income and tax owed. Or start a test return in Turbotax online (it's 'free to start' and you only pay when you are ready to file, or start a test return in the desktop version of Turbotax for 2021 installed on your own computer. Or the turbotax TaxCaster app (it may still be programmed for 2020 rules but the result will be similar to 2021 TaxCaster tax calculator

I would use the IRS withholding calculator Thanks in advance for the you for the reply! Is there indeed a penalty if I come up 'waaay' short? Is there anything else we can do to mitigate how much we owe come tax time? In addition to the 20% mandatory withholding, we're only taking out 'normal' withholdings on our regular paychecks. Somewhere in the past, I was told that if one is 'waaay' short on income tax via normal withholdings, there is a large penalty in addition to taxes due. Is our tax bracket determined by our agi? What gets subtracted from our gross? (Property taxes, charitable contributions, child care, etc.)Īnd is that number our 'adjusted gross income'?

This is SIGNIFICANTLY more than ever before due to taking money out of my 457(b) for a home remodel. My wife and I will gross in the neighborhood of $478,000 in 2021. (And I can attest to that every morning when I hear the snap-crackle-pop getting out of bed!) Now that I can type more than 150 characters, I can be a little more specific.

2021 taxcaster