Whether increasing your withholding is sufficient is unknown. It actually may not be necessary if you don't object to owing when it comes time to file your 2024 return in 2025.
the safe harbor rules. NOTE the following is based on the tax law as currently written. It is unlikely that these rules will be changed for 2024 but could change in the future.
There will be no federal penalties for not paying in enough taxes for 2024 if withholding and:
- timely estimated tax payments equal or exceed 90% of your 2023 tax or
- timely estimated tax payments equal or exceed 100% of your 2023 tax (110% if your 2023 adjusted gross income is more than $150K) or
- the balance due after subtracting taxes withheld from 90% of your 2023 tax is less than $1,000 or
- your total taxes are less than $1,000
state laws differ
since you expect your 2024 taxes to exceed your 2023 taxes, number 2 would be a safe option, but you could end up owing, maybe a lot but penalty-free, when filing your 2024 return.
also note that if your Modified Adjusted Gross Income for 2024 is over $250K you may end up owing an additional 3.8% Net Investment Income Tax on the smaller net investment income or MAGI over $250K. See Form 8960.
