Do I need to prepay estimated taxes due to recent Capital Gains from sale of stock?

[FXG]

Question for filing taxes for 2020.

I recently sold stock in March 2020.  Total sale = $120k.  Total Capital gains = $68k.  In 2019 taxes, my gross income was ~$190k, adjusted gross income = ~$165k.  I owed $694.

Since I will need to pay taxes on the $68k of additional income, and nothing was withheld for taxes, do I need to prepay my taxes to avoid penalty?  Also, how would my situation be different if I purchased Turbo Tax Premier for next year's taxes (instead of Deluxe)?

 Thanks,

FXG

[DavidD66]

You will have to use Premier next year in order to report your stock sale.

If you don't want to pay a penalty for underpayment of estimated tax, you can make estimated payments, increase your payroll withholding by completing a new Form w-4 and submitting it to your employer.  Also, in order to avoid a penalty, you only need meet the parameters of the safe harbor rule. The estimated safe harbor rule has three parts:

• If you expect to owe less than $1,000 after subtracting your withholding, you won't owe a penalty.
• If you pay 100% of your tax liability for the previous year via estimated quarterly tax payments or payroll withholding, you won't owe a penalty.  If your adjusted gross income for the year is over $150,000 then it's 110%.
• If you pay at least 90% of your actual liability for the current year, you won't owe a penalty.