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Calculating safe harbor amount for quarterly estimated tax
Hello!
I'm going to be involved in a stock sale (company being acquired) next week that's going to complicate my 2021 taxes tremendously. I plan to hire a CPA, but given the time crunch and the fact this is their busiest time of the year, it's looking like my best bet is to hold off until after 4/15 (or I guess 5/17 now).
That means I need to figure out a Q1 estimated tax payment on my own, and for simplicity I've decided to use the safe harbor method based on last year's taxes so I can at least avoid penalty. I think I understand the method, but I want to make sure this is right. (I'm not a fisherman or farmer and I don't think any other "special" circumstances apply to me, so let's assume they don't.)
1. Take 110% of my total tax from 2020 (AGI was over $150k), from line 24 of my 1040.
2. Divide by 4
3. Subtract taxes withheld from my paychecks for the first 3 months of 2021 (I'm still a W2 employee with regular withholdings).
The parts in bold relate my main questions.
1. Is line 24 ("total tax") the correct number to use?
2. Am I correct that I can subtract what's already been withheld from my regular paycheck?
3. If yes, would I subtract social security and Medicare tax withheld too, or just federal income tax?
Thank you in advance!