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Hi we are closing on the sale of our vacation home this week. We will realize a capital gain of about 100k. Do I need to pay this in some type of quarterly payment now
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Hi we are closing on the sale of our vacation home this week. We will realize a capital gain of about 100k. Do I need to pay this in some type of quarterly payment now
maybe. there are rules to avoid penalties for not paying in enough taxes during the year.
There will be no federal penalties for not paying in enough taxes during the year if withholding
- And timely estimated tax payments equal or exceed 90% of your 2021 tax
or
- And timely estimated tax payments equal or exceed 100% of your 2020 tax (110% if your 2020 adjusted gross income was more than $150K)
or
- the balance due after subtracting taxes withheld from 90% of your 2021 tax is less than $1,000
or
- your total taxes are less than $1,000
State laws differ. If there are underpayment penalties under the normal method you do have the option of using the annualized income method to see if that will reduce or eliminate the penalties
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Hi we are closing on the sale of our vacation home this week. We will realize a capital gain of about 100k. Do I need to pay this in some type of quarterly payment now
To avoid a penalty for underpayment of 2021 taxes, you should make an estimated tax payment to cover the taxes on the capital gain.
You are past the first three quarterly deadlines for the estimated payments but can pay the full estimate by January 15, 2022.
Here are IRS instructions, forms, and worksheets
Your state will also have their own estimate forms.
You can pay directly on the IRS website https://www.irs.gov/payments
Be sure to mark the right kind of payment and year.....2021 Estimate.
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