Tax question For the 2022 tax return Due April 2023-
Is my interpretation of the situation correct? I believe that I don’t need to file any tax payment estimates and that I can pay the full tax liability when I file my tax return April 2023 And avoid any late payment penalties. For the 2023 tax return Due April 2024, I will start to do estimated tax payments if my trades are highly profitable, as I will need to to avoid a late payment penalty.
So my current plan is to just liquidate the amount of investments needed to pay the tax bill around April 2023.
Context:
We live in California
I’m going to have a tax liability of over well over $50,000 for this year Just based on my returns up until today. My stock investment returns this year have been around 50% and it’s all short term capital gains.
I’m married and my wife makes about $100,000 per year pretax ($6000 net each monthly paycheck) as a teacher but we definitely cannot withhold enough to pay for that amount of tax liability. And her first paycheck after the summer ends is October 1, 2022.
Correction: I qualify under the safe harbor rule based on my wife's withholding being enough to meet the prior year's tax liability. My understanding is that I can pay the entire tax liability April 2023 without any late payment penalties, is this correct?
