Apply Overpayment to Next Year's Taxes
Apply Overpayment to Next Year’s Taxes
Once you complete your return you can determine if you are receiving a refund. A refund occurs if you paid more income tax than the amount you owed. If so, you can get a refund of the amount you overpaid or you can choose to apply all or part of the refund to your next year’s (2015) estimated tax. You may only elect this option if you are filing Form 1040 or Form 1040A.
Please Note: If you choose to have your refund applied to your next years estimated tax amount, you cannot change your mind and have it refunded to you after the due date of April 15th.
Why would you apply your refund to next year’s taxes?
- If your refund is small, you may want to apply the entire amount to next year's tax return for the sake of convenience.
- If your refund is larger than usual, you may want to apply part or all of it to next year's taxes, especially if you're anticipating a higher tax liability in the future (e.g. no longer able to take certain tax credits or deductions, higher income, change in filing status, etc.).
- If it's getting close to April 15 and you pay estimated taxes, consider applying part or all of the overpayment to your first quarter estimated tax payment, which is due on April 15. This can prevent or reduce future underpayment penalties.
Taxslayer Entry: Once logged into the account select Federal Section>>Payments and Estimates>>Apply overpayment to Next Year’s estimated Payments.