@jonpagel please note I had some nad dates please review because the safe harbor for 2022 100/110% is based on your 2021 AGI
1. The long term capital gain bracket is determined by my job income combined with the taxable profit from the sale correct? So if I made $500k from my job and $200k on the sale I would be up in the 20% bracket?
no. before the gain is taxed at the capital gain rate you must recapture the depreciation allowed or allowable. that's tax would probably be 25% (section 1250 recapture). which such high income if your rental activity is passive there will be an additional 3.8% net investment tax.
2. Do I need to pay the tax for the sale like right now using the estimated tax portal or can I just wait until I do my 2022 taxes in the new year? I have a normal job which withholds taxes so I have never had to do the estimated taxes before…I don’t want to have a penalty if I wait
There will be no federal penalties for not paying in enough taxes during the year if withholding
1) And timely estimated tax payments equal or exceed 90% of your 2022 tax
or
2) And timely estimated tax payments equal or exceed 100% of your 2021 tax (110% if your 2021 adjusted gross income was more than $150K)
or
3) the balance due after subtracting taxes withheld from 90% of your 2022 tax is less than $1,000
or
state laws differ
since you apparently have significant income, i would recommend making sure your federal withholding is 110% of your 2021 tax.
or you can make an estimated tax payment if you don't think you'll meet the 90%, 100/110% thresholds referred to above. however, to avoid the penalty with uneven income generally, you have to use the annualized income method for the penalty calculation.
Turbotax will do this calculation with the proper input. you may want to see what's involved by looking at the AI computation on page 3 of form 2210. note that you have to determine your income, deductions and withholding for the following periods 1/1 - 3/31, then 1/1 - 5/31 then 1/1 - 8/31 the last column uses the numbers per the return.
https://www.irs.gov/pub/irs-pdf/f2210.pdf
sorry some bad dates
