It depends. The IRS system is 'pay as you go' which simply means when you make money they want the tax dollars. If you did not pay estimated taxes equally throughout the tax year, then you could have a penalty. Check the dates and amounts of estimated tax payments made to see if they are equal or paid late.
There could still be a penalty if the payment you made was in a period later than April 15th and not paid evenly throughout the year. If this could be the case then you can use the 'annualized method' to show exactly when the unplanned capital gain you earned in 2024.
You can choose to use the annualized income/tax method in TurboTax by using the steps below. Have your 2023 return ready just to confirm your numbers.
- Open your TurboTax Online or TurboTax Desktop return
- Search (upper right) > Type underpayment penalty
- TurboTax Online: Click 'See More' at the bottom of the FAQ that pops up > Click on Go to annualizing your tax
- TurboTax Desktop: Click the Jump to.. link
- Continue selecting to use the annualized method and enter the income in the slots where earned. For wages, interest, dividends or anything earned equally through out the year divide by 12 and multiply by 3/5/8. Add the unplanned capital gains in the slot where the sales occurred.
- Make sure you have entered your estimated taxes in the appropriate quarter in that section. TurboTax will use them to calculate any penalty.
- Where do I enter my estimated tax payments?
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