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Level 4

Question

Does one have to pay estimated taxes for capital gains? I have a large amount of capital gains for the first quarter of 2021, do I need to pay estimated taxes on them?

Forum|Forum|5 years ago
March 30, 2021
6 replies
20 views

No text available

TurboTax Self Employed Online

Critter-3

Level 15

Do I need to make estimated tax payments to the IRS?

You must make quarterly estimated tax payments for the current tax year (or next year) if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits.

- 2. You expect your withholding and credits to be less than the smaller of:
90% of the tax to be shown on your current year’s tax return, or
100% of the tax shown on your prior year’s tax return. (Your prior year tax return must cover all 12 months.)

https://ttlc.intuit.com/replies/3301891

How do I make estimated tax payments?

https://ttlc.intuit.com/replies/3301258

Can TurboTax calculate next year's federal estimated taxes?

https://ttlc.intuit.com/replies/4242911

Can TurboTax calculate the estimated payments for next year's state taxes?

https://ttlc.intuit.com/replies/3301735

rncala

Level 3

Bottom Line: If it's taxable you need to pay estimated taxes. See https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates

or IRS.gov for rules, instructions and calculators.

If you are reasonably sure of your yearly income, interest and non qualified dividends you can pay the appropriate estimated tax (0,10 or 20%) on capital gains and qualified dividends. If you earn significantly more, or less than expected you can add funds to your account at IRS.gov online at any time.

For,

Earnings + Interest + Non Qualified Dividends < $40,000 Single or $80,000 Married

Capital Gains and Qualified Dividends are not taxed.

If,

Earnings + Interest + Non Qualified Dividends = $40,001 to $441,450 Single or $80,001 to $496,600 Married

Capital Gains and Qualified Dividends are taxed at 15%

For,

Earnings + Interest + Non Qualified Dividends > $441,451 Single or $496,001 Married

Capital Gains and Qualified Dividends are taxed at 20%

daled1Author

Level 4

Thanks! That clears it up.

fanfare

Level 15

100% of the tax shown on your prior year’s tax return.

In other words, no matter how big your capital gain,

if this is satisfied you don't need to send any more in 2020.

BUT, you will have a big tax bill in 2022.

smokinbro

Level 2

yes if it results in material taxes owed

daled1Author

Level 4

Hi smokinbro,

Are you responding to my original post? Or the most recent reply I made?

rncala

Level 3

Most recent, in the context of my reply to your OP.

Jane H Fox

Level 2

I had large capital gains in 2021. I do not foresee much in 2022. How do I calculate estimated taxes for 2022?

ErnieS0

Level 15

You do not have to pay estimated taxes if you expect to owe less than $1,000 (though you still may pay some interest for not making timely payments).

Use the TurboTax estimate in the program:

Type w-4 in Search in the top right
Select Jump to w-4
Say No to Do you want to change your W-4 withholdings for 2022?
Select Review Now on Review Your Estimates? and update your info.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

daled1Author

Level 4

If you pay 110% of what you paid in 2021 then you won't receive a penalty.

oscarvie

Level 2

I had capital gains of around 100,000 dollars total in 2021. What should I pay in my estimated tax payment.

I have requested an extension for filing.

HelenC12

Level 15

Yes, you should have paid estimated taxes, on your $100,000 capital gains, in the first quarter of 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.

Regarding what you should pay in, we can't tell you an amount or percent since the amount is dependent on all your income, deductions, filing status, etc. One way to get a good estimate of how much to pay is to use TurboTax.

Additional information: How can I pay my federal taxes?

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"