Non-recurring Capital Gains

Forum|Forum|5 years ago
April 28, 2021
3 replies
30 views

I had large capital gains in 2020 which I don't expect again. Do I still have to pay quarterly Taxes in 2021 on income that will not occur?

HelenC12

Level 15

No, you don't have to pay estimated taxes in 2021.

Taxes are pay-as-you-go. This means that you need to pay most of your tax during the year, as you receive income, rather than paying at the end of the year. If you don't have any income that you have to pay estimated taxes on, you don't have to pay quarterly estimated taxes.

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jane14_2

Level 2

Turbo Tax generated quarterly payments and the income event is not going to happen again - can I ignore the quarterly payments ?

Or do I have to fill out another form to explain to the IRS.

JohnB5677

Level 15

As @HelenC12 stated, "no" you do not. The estimated tax vouchers do not go to the IRS. They are for you. If you aren't going to receive the capital gains this year, and if you typically don't owe taxes on a regular basis, you do not have to pay any quarterly taxes.

However, if in other years you have ended up owing taxes. I suggest you prepare a W-4 and give it to your employer. The W-4 will re-allocate your tax withholding to make it more accurate.

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