Estimated taxes

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I am scheduled to close on the sale of an investment property in late May. Do I make the estimated tax payment at the time of the sale or wait until June 15th? Also, do I make the full estimated tax payment or divide into 3 equal payments (June, September, January)?

rjs

Level 15

You should pay the full estimated amount by June 15. You can pay it earlier if you want to.

Mike9241

Level 15

under the default method for computing underpayment penalties it is assumed 1/4 of your 2024 taxes were due each period. You will be subject to penalties for the first quarter unless you use the Annualized installment Income Method on page 3 of the 2210

ways to avoid penalty and/or no need to use the AIIM

if Federal withholding and

timely estimated tax payments equal or exceed 90% of your 2024 tax or
timely estimated tax payments equal or exceed 100% of your 2023 tax (110% if your 2023 adjusted gross income was more than $150K) or
the balance due after subtracting taxes withheld from 90% of your 2024 tax is less than $1,000 or
your total taxes are less than $1,000

this means that withholdings and estimated tax payments for the 1st quarter - 1/1-3/31 for option 1 must be 22.5% of your 2024 tax or $25% (27.5% if agi >$150K) of your 2023 tax

state laws differ

Mike9241