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Returning Member
posted May 1, 2024 6:20:51 AM

Estimated taxes

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)?

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2 Replies
Level 15
May 1, 2024 7:03:07 AM

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

 

Level 15
May 1, 2024 9:27:54 AM

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

  1. timely estimated tax payments equal or exceed 90% of your 2024 tax or
  2. timely estimated tax payments equal or exceed 100% of your 2023 tax (110% if your 2023 adjusted gross income was more than $150K) or
  3. the balance due after subtracting taxes withheld from 90% of your 2024 tax is less than $1,000 or
  4. 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