Correct on all counts except the timing of the payments. If you choose to make an estimate you should make the quarterly payment in full in the quarter the stock sale happened since the IRS wants the taxes paid as the income is earned. However, any withholdings done thru the payroll system are considered paid evenly thruout the year even if all the payments are done on the last paycheck of the year. But if your spouse is no longer working AND the sale is considered long term then you may only need to pay 90% of the 2022 income tax if it will be less than 2021 ... so do some estimated payment calculations to decide the amount you need to make in advance to avoid an underpayment penalty.
Of course, you can wait to you file to pay the tax + penalty when you file your return if you want to keep the money until then and keep it "working" for you. The underpayment penalty is currently at 4% so if you can make a better rate of return then go for it.
The following is the general rule:
You must pay estimated tax for 2022 if both of the following apply.
- You expect to owe at least $1,000 in tax for 2022 after subtracting your withholding and tax credits.
- You expect your withholding and tax credits to be less than the smaller of:
- 90% of the tax to be shown on your 2022 tax return, or
- 100% of the tax shown on your 2021 tax return. Your 2021 tax return must cover all 12 months.
Note: If your AGI for 2021 was more than $150,000 ($75,000 if your filing status for 2022 is married filing a separate return), substitute 110% for 100% in (2b)
