topic Do I need to make the calculated estimated tax payments for 2017 even if I do not expect to have anywhere near the capital gains I received in 2016? in Get your taxes done using TurboTax

Do I need to make the calculated estimated tax payments for 2017 even if I do not expect to have anywhere near the capital gains I received in 2016?

ddo824 — Tue, 04 Jun 2019 20:22:31 GMT

I had an unexpected large short term capital gain in 2016 from the sale of a stock. As such, I received notification to make estimated payments for 2017. I am currently retired, and all of my income is derived from investments. As such, there is no guarantee that I will have any income to report for 2017, except for dividends. I sincerely doubt that I will have anywhere near the gain I had in 2016. I am just questioning the need to make the estimated payments, and if not made how to determine the potential amount of penalties I may incur if I fail to do so and do exceed the $1000 penalty threshold. Thanks.

No, you don't need to send the payments. The program pro...

AnthonyC — Tue, 04 Jun 2019 20:22:33 GMT

No, you don't need to send the payments. The program produces these forms as a convenience for you to make the payments. You are not locked into those payments. The program will produce them automatically if you owed tax as the government requires you to withhold enough tax to cover your tax liability or make estimated tax payments. If you don't have enough withholding and you don't make estimated tax payments, then the IRS or your state can charge you with an underpayment penalty.

If you owed tax this year because of a one-time event and you won't owe next year, then you can decline to send any payments. You can also decline to send the payments even if you will owe tax next year, but you may be assessed an underpayment penalty.