If you have a lump sum of income during the year, you may be required to pay make an estimated tax payment. The tax system is pay as you go, and if you don’t pay during the year, you can be assessed a penalty for under payment, even if you pay in full when you file your tax return.
For income received between January and March, the estimated payment is due April 15. For income earned in April or May, the estimated payment is due June 15. For income received from June through August, the estimated payment is due September 15. And for income received between September and December, the estimated payment is due January 15 of the next year.
you first need to determine how much capital gain you have. Then, determine how much of that gain is taxable, based on whether or not you qualify for the exclusion. Then, the taxes on the capital gain will either be 15% or 20%. That is the size of the estimated tax payment you should make now, to avoid a penalty later. If you overpay the estimate, the difference will come back to you as part of your tax refund.
