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Should I pay Q4 1040ES on rental sale if I've already paid more than 100% last year's AGI

We sold a rental property Aug 2021 and will owe Cap Gains tax.  Also withdrew from 401K in 2020 and had 18% Fed tax withheld --the witholding exceeds 100% of last year's AGI.

Is it necessary to make a Q4 ES payment to cover the estimated tax due on capital gain from sale of rental? (still trying to compute cap gain.)  Or am I covered per Safe Harbor rules.

Would I absolutely need to fill out form 2210 and annualize to avoid a Penalty for underpayment of estimated tax if I don't make a Q4 payment, or is the 100% of 2020 AGI already paid in, enough at this time. 

Also, I might owe some penalty for not paying estimated tax on the sale back in Q3 (about 40 days worth) but not clear on this.

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1 Reply
ThomasM125
Expert Alumni

Should I pay Q4 1040ES on rental sale if I've already paid more than 100% last year's AGI

You won't get a penalty for underpayment of 2021 income tax if you paid in taxes for 2021 for an amount equal to 100% of your income tax from 2020 in a timely manner (110% if your income is over $150,000.)

 

All you need to do is file your tax return and pay any tax due by it's due date, not including extensions.

 

 

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