Ask an AI Accountant

Yes, you likely will need to make estimated tax payments this year. The IRS generally requires you to make estimated tax payments for the current tax year if both of the following situations apply:

1) You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and refundable credits.
2) You expect your withholding and refundable credits to be less than the smaller of:
- 90% of the tax to be shown on your current year’s tax return, or
- 100% of the tax shown on your prior year’s tax return.

Since you didn't owe any tax last year, you wouldn't meet the second condition. However, if you expect to owe more than $1,000 this year, it's a good idea to start making estimated tax payments to avoid potential penalties. The due dates for 2023 are January 17, April 18, June 15, and September 15.

This is a strange one. The AI correctly cited the IRS regulation around making estimated tax payments, acknowledged that they both must be met in order for it to be required, and then admitted that one of them wasn't met and phrased it as "it's a good idea to..." at the end. Still counting this as incorrect.