Bought an investment property in 2021. Sold it in 2022. I am in 24% tax bracket. Do I need to pay estimated taxes in 2022 or can wait until I file?

[sergeibv1972]

I bought an investment property in 2021 and made a decision to flip it instead.  I will be realizing a short-term gain on the sale.  I work with W2 income and in 24% tax bracket.  Do I need to pay an estimated tax on the sale immediately or it can wait until next tax season?  Should I adjust my tax withholdings at work?  Thank you.  

[pk]

@sergeibv1972  ideally you should be current with your taxes per quarter ( both Fed and State ).  But for the Fed. as long as you file and pay all liabilities by Jan 2023, you may not be penalized  if not current.  Most states  though want current  by quarter ( and some CA even have mandatory withhold  from sales proceeds).

Note that short-term gains are treated as "ordinary income".

Is there more I can do for you ?

[Mike9241]

to avoid penalties for not having enough taxes withheld and/or paid in on estimates for 2022, your must meet either of these tests.

1) withholding and timely estimated tax payments for 2022 at least equal 100% of your 2021 tax (110% of your 2021 tax if your adjusted gross income was over $150,000 or

2) withholding and timely estimated tax payments are at least equal to 90% of 2022 tax.

that short-term gain may push you into a higher tax bracket.  so the question is do you feel comfortable in possibly owing a lot of money come 4/15/2023

also, state laws differ if you have a state income tax. 

depending on the date of sale, you may also be able to avail yourself of the Federal annualized income method to reduce or eliminate underpayment penalties.  

[sergeibv1972]

Thank you.  If I want to pay an estimated tax, does Turbo tax have this option available after taxes have been filed?

[DoninGA]

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@sergeibv1972 wrote:

Thank you.  If I want to pay an estimated tax, does Turbo tax have this option available after taxes have been filed?

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Estimated taxes cannot be paid directly from TurboTax to the IRS.

You can print and mail the Form 1040-ES with an estimated tax payment to the IRS - https://www.irs.gov/pub/irs-pdf/f1040es.pdf

Or you can pay estimated taxes directly on the IRS payment website here - https://www.irs.gov/payments