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Must I pay estimated tax on capital gains?

Forum|Forum|6 years ago
June 1, 2019
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Sold employee stock in December. Total annual income, including capital gains, is less than $150,000. I have always done my own taxes through TurboTax, but need help this year, as taxes get more complicated. I read that if the taxes withheld are at least what I owed last year, then I do not have to pay estimated taxes. Thanks in advance!

Best answer by bwa

For estimated taxes, it doesn't matter where the income came from. You'll have to pay an underpayment penalty for 2015 if you owe more than $1,000 in taxes (after withholding) and:

Your taxes withheld don't cover at least 90% of what you owe for 2015, or
Your taxes withheld aren't at least 100% of what you owed for your 2014 taxes, if your adjusted gross income (AGI) is up to $150,000, or
Your withholding is 110% if your AGI is more than $150,000. (The AGI amount is $75,000 if you're married filing separately.)

Even if you owe less than $1,000 (or have a refund coming) you can still owe an estimated tax penalty if the payments were not made ratable throughout year. For example, if you are going to owe taxes and make a large estimated tax payment late in the year, even one large enough to generate a refund, it will not negate the penalty for underpayments before that date.

B

bwaAnswer

For estimated taxes, it doesn't matter where the income came from. You'll have to pay an underpayment penalty for 2015 if you owe more than $1,000 in taxes (after withholding) and:

Your taxes withheld don't cover at least 90% of what you owe for 2015, or
Your taxes withheld aren't at least 100% of what you owed for your 2014 taxes, if your adjusted gross income (AGI) is up to $150,000, or
Your withholding is 110% if your AGI is more than $150,000. (The AGI amount is $75,000 if you're married filing separately.)

Even if you owe less than $1,000 (or have a refund coming) you can still owe an estimated tax penalty if the payments were not made ratable throughout year. For example, if you are going to owe taxes and make a large estimated tax payment late in the year, even one large enough to generate a refund, it will not negate the penalty for underpayments before that date.