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How to predict withholding for a 2024 Vanguard fund sale?

Assuming a Vanguard fund sale has been performed in Q1 of 2024:

 

The 1099-DIV (or Consolidated Form 1099-2021) for 2024 has not been produced yet by Vanguard.

But I would like to avoid late withholding payment penalties and interest. Which means I should "guesstimate" that taxes I am expected to pay by April 2025...

What is the recommended way to accomplish that?

 

Thank you

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How to predict withholding for a 2024 Vanguard fund sale?

It could be anywhere from 0% (qualified dividend) up to about 24% (non-qualified dividend) and you're subject to the Net Invesment Income Tax). the rate will also vary depending on your filing status and other income. 

 

if you want to be safe from federal underpayment penalties the easiest way is to make sure withholding and timely estimated tax payments equal or exceed 100% of you 2023 tax. That rises to 110% if your adjusted gross income for 2023 was $150,000 or more.

 

Another option is for withholding and estimated tax payments to equal or exceed 90% of your 2024 tax

 

If you are subject to state income taxes their laws vary so we would need to know the state.  

 

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2 Replies

How to predict withholding for a 2024 Vanguard fund sale?

It could be anywhere from 0% (qualified dividend) up to about 24% (non-qualified dividend) and you're subject to the Net Invesment Income Tax). the rate will also vary depending on your filing status and other income. 

 

if you want to be safe from federal underpayment penalties the easiest way is to make sure withholding and timely estimated tax payments equal or exceed 100% of you 2023 tax. That rises to 110% if your adjusted gross income for 2023 was $150,000 or more.

 

Another option is for withholding and estimated tax payments to equal or exceed 90% of your 2024 tax

 

If you are subject to state income taxes their laws vary so we would need to know the state.  

 

How to predict withholding for a 2024 Vanguard fund sale?

"Vanguard fund sale?"

 

If you sell the shares, it is not a dividend.

You will get a 1099-B.

The holding period determines whether your gain is Long Term or Short Term.

 

Generally, figure 20% for Long Term gain and your usual tax rate, or more, for Short Term gain.

 

@dbe2022 

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