You'll need to sign in or create an account to connect with an expert.
no, it doesn't. the options to avoid penalties on underpaying estimated taxes are
withholding (which can be reported as 25% paid each quarter despite what the actual amounts withheld are or you can use the actual withholding for each estimated tax period (3,5,8, and 12 months) +timely estimated tax payments (4/15/21,6/15/21,9/15/21,1/17/2022= either
90% of 2021 tax
or 100% of 2020 tax (110% if 2020 adjusted gross income more than $150k)
if you can use the 2020 100% option and say your 2020 tax was $5,000, $1250, paid in timely each quarter would avoid the 2021 penalty. this would be true even when filing your 2021 return you find you owe the $11K and pay it by 4/15/2022
If the LONG TERM Cap gains is only $11K and your only other income is SS benefits then you will owe nothing on the 2021 return so an estimate is not required especially if you did not file a 2020 return.
If you owed no tax for 2020, you do not need to prepay tax on your 2021 income. The rule is: you can avoid the under payment penalty by pre paying (in quarterly installments) the amount of tax from the previous year. Since you had 0 tax in 2020, you do not need to prepay anything.
I agree with Critter2, If your long term Capital gains (LTCG) are only $11K and your only other income is SS benefits then you should owe nothing*.
To verify, you can use this tool: https://turbotax.intuit.com/tax-tools/calculators/taxcaster/?s=1.
*LTCG are taxed at 0% until your total income reaches the third income bracket. Having capital gains can, sometimes, make some of your SS benefits taxable.
Social security only becomes taxable when added to sufficient other income.
Social security (including SSDI) becomes taxable when your income, including 1/2 your social security, reaches:
Married Filing Jointly(MFJ): $32,000
Single or head of household: $25,000
Married Filing Separately and lived with your spouse at any time during the tax year: $0
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
nm123456789
New Member
scoaste
Returning Member
JQ30
New Member
clien-comcast25
New Member
M Furius Camillus
Level 1
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.