FAQs

Question: Where Do I Enter Tax Withholding or Estimated Tax Payments

Answer: You should ignore (i.e., not enter) both withholding and estimated payments.

Here's why:

The software calculates the actual taxes due on an annual basis.

Cash outlays such as estimated payments and withholdings affect the timing of payments, but not the amount.

To see this, think about the cash flows. First, withholding or estimated payments are made. They may be either more or less then actual taxes. Then, when the tax return is filed, the individual either gets a refund or pays additional tax.

At the end of the day, the overall tax payment (estimated payments + withholdings - refund + payment due) is the actual tax -- the same as the amount calculated by the software. If these amounts were entered separately, the result would be double-counting.

So the correct treatment, for purposes of the software, is to ignore both tax withholding and estimated payments.