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newtoncd8
New Member

Sold company stock, but taxes not taken out

I recently changed companies and I got a payout for my company stock from the old company. While I know my cost basis, what I don't know is, since the company did not take out any taxes, I am curious if I can wait until tax filing time (next year) or do I need to make a payment to the IRS now? Thanks in advance.

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Accepted Solutions
Leonard
Intuit Alumni

Sold company stock, but taxes not taken out

If you received the payout in 2018 then you will have to report the payout on your 2018 tax return.

If the payout was received in 2019 you can wait and report the payout on your 2019 tax return.

You will report the transaction using Form 1099-B file your tax return.

 

[Edited 03/10/2020 | 7:59 am PDT]

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3 Replies
Leonard
Intuit Alumni

Sold company stock, but taxes not taken out

If you received the payout in 2018 then you will have to report the payout on your 2018 tax return.

If the payout was received in 2019 you can wait and report the payout on your 2019 tax return.

You will report the transaction using Form 1099-B file your tax return.

 

[Edited 03/10/2020 | 7:59 am PDT]

newtoncd8
New Member

Sold company stock, but taxes not taken out

It was just this past week, so I will claim the taxes when I file in 2019-- thank you very much for taking the time to answer my question.

Sold company stock, but taxes not taken out

You really didn't get an answer to your direct question of "do I need to make a payment to the IRS now?"

The answer to that question is "probably not, but it's really impossible to say without knowing your exact situation."

What can happen with you get an unexpected windfall where taxes weren't withheld - this is your situation - is that you might end up being "underpaid", (a bit of tax jargon with some specific meaning), and being assessed underpayment penalties when you file your income tax return in April, 2020.

Most taxpayers will avoid being underpaid if they:

1)owe less than $1,000 in tax after subtracting their taxes WITHHELD and available tax credits,

OR

2)if they paid at least the lesser of
             a)90% of the tax for the current year, or
             b)100% of the tax shown on the return for the prior year.  (If last year's return shows AGI over $150K (for married filing jointly) then change that "100%" figure to "110%.)

If the amount of gain on your sale of stock is relatively small and if in 2019 you'll be working as a W-2 employee with your withholding amounts pretty much unchanged from the amounts withheld in 2018, then it's highly unlikely that you'd be assessed an underpayment penalty.  But this is one of those situations where nobody here can give you a direct "Yes" or "No" to your direct question of "do I need to make a payment to the IRS now?" because nobody here has access to your personal income tax situation.

Tom Young



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