Business & farm

Hi Masa131!

Congratulations on your retirement!

I'll go through each of your questions.  

1. Is my understanding correct?
   Yes, the tax rates you mention (20% Federal and 7.25% HI) are correct for long term capital gains.  But don't forget the Net Investment Income Tax, which is an additional 3.8% of any investment income.  
   
   
2. How do I calculate how much I should pay by 9/16 and 1/15?
   The estimated tax payment due 9/16 should cover the tax for income through 8/31.  For the stock options, you'll need to calculate your taxable gain by subtracting your cost basis from the proceeds.  If you have any other taxable income besides the capital gains, you will need to take this into account also.
   
   
3. If I sell more stock options later in this year, for example additional proceed of $500K, how do I calculate and change the estimated tax amount?
   If a later stock sale occurs after 8/31, the tax payment for that income is due 1/15/2025.  You would follow the same approach by calculating the total tax you expect to owe and subtract the payment made on 9/16.
   
   
4. How can I make the estimated tax for Fed and HI? Is there any online links?
   Yes, you can make Federal estimated tax payments online at www.irs.gov/payments.  Hawaii estimated payments can be made at https://hitax.hawaii.gov/_/. 
   
   
5. If I miss the deadline (9/16 and 1/15) can I still pay the estimated tax later like 9/31 and 1/31?
   If you miss the payment deadline, you can always make a late payment.  The IRS will still consider the payment late and calculate interest for the days the payment is late, but it's better than waiting to the next installment date or 4/15.  
   
   
6. What is the penalty of not paying the estimated tax until I file the 2024 tax by 4/15?
   The current rate for IRS underpayment penalty is 8%.  This rate is updated quarterly, but it has been 8%  for several quarters now.
   
   

Thanks for participating in TurboTax's Ask the Expert event today.  I hope this information was helpful!

Sincerely,

Kimberly, CPA for over 30 years