Hello! I am working on my 2020 taxes (TurboTax Deluxe), and expect to file by the April deadline. This month (March, 2021), I sold some stock and I was fortunate to have $40,000 in capital gains. I know that I will be assessed a fee if I wait until next year (when I am doing my 2021 taxes) to pay the tax on this amount, and I should prepay an estimate of the tax before April 2021. I have some question that I am hoping the community can help answer:
1) Am I correct about needing to prepay estimated taxes now (and not waiting until 2021)? I won't have enough of my income tax withholdings from my "regular job" to cover the taxes from the Capital Gains.
2) What's the best way to estimate how much I should pay? Part of the capital gains are long-term (18% rate, I believe) and part of the capital gains are from short-term holdings. I'm not sure what the tax rate should be.
3) I assume that I can use TurboTax to facilitate my quarterly tax estimate payments. Is this the case? Where do I go to do this?
4) Can I pay the estimate for these 2021 Q1 Capital Gains (the $40,000) along with my 2020 tax returns, which I am working on now? Or do I need to pay and submit this estimate completely separately from my 2020 taxes?
Thanks, all!!
