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pamc5
New Member

When do I file capital gains? With my annual return?

I sold a rental property and would like to know when the capital gains return must be filed.
2 Replies
Bsch4477
Level 15

When do I file capital gains? With my annual return?

Your gain is reported when you file your tax return.  Give some thought to whether you should pay estimated tax on your profit to avoid a penalty for under withholding. 

Hal_Al
Level 15

When do I file capital gains? With my annual return?

Simple answer: With your annual return.

 

There is no separate return for paying tax on capital gains. All income is reported on one annual tax return.

 

A different way to ask your question is: do you need to make an estimated payment of tax on the additional income.  Probably not.

 

You should make estimated tax payments for the current tax year if both of the following apply:
- 1. You expect to owe at least $1,000 in tax for the current tax year, after subtracting your withholding and credits. 
- 2. You expect your withholding and credits to be less than the smaller of: 90% of the tax to be shown on your current year’s tax return, or  100% of the tax shown on your prior year’s tax return. If your previous year's adjusted gross income was more than $150,000 (or $75,000 for those who are married and filing separate returns last year), you will have to pay in 110 percent of your previous year's taxes to satisfy the "safe-harbor" requirement.

 

Otherwise. you can wait to pay at tax filing time.


TurboTax (TT) can prepare the quarterly payment vouchers. In your 2019 software, enter at:

 

Federal Taxes or Personal (H&B version)

 

-Other Tax Situations

 

  -Other Tax Forms

 

    -Form W-4 and Estimated Taxes - Click the Start or Update button

 

On the next screen answer No to the W-4 question

 

 

If your goal is just to avoid the underpayment penalty, then paying 100% of the prior year tax liability is the “safe haven”


Or you can obtain  blank IRS Form 1040-ES from the IRS. The form and instructions are at this link:  https://www.irs.gov/pub/irs-pdf/f1040es.pdf

 

You can also pay Federal directly here.  Be sure to select 1040ES:

https://www.irs.gov/Payments

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