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hgfouts
New Member

I have a fairly large capital gain for the year. Do I need to make an interim tax payment, and if so, how do I do that?

 
2 Replies
DoninGA
Level 15

I have a fairly large capital gain for the year. Do I need to make an interim tax payment, and if so, how do I do that?

See this IRS Tax Topic for the Underpayment penalty - https://www.irs.gov/taxtopics/tc306

 If you didn't pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and refundable credits, or if they paid withholding and estimated tax of at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller. 

 

Use the worksheets for Form 1040-ES to calculate any estimated taxes you should pay in 2019.  The 2019 fourth quarter estimated tax payment is due on or before January 15, 2020 - https://www.irs.gov/pub/irs-pdf/f1040es.pdf

Any type of federal tax payment can be made using the IRS payment website - https://www.irs.gov/payments

Anonymous
Not applicable

I have a fairly large capital gain for the year. Do I need to make an interim tax payment, and if so, how do I do that?

if you been paying estimated taxes throughout 2019 based on what DoninDa provided there will be no estimated tax penalties even if the capital gain substantially increases your taxable income for the year.   if not,

 generally for estimated tax penalties,  income and taxes are prorated throughout the year.   if your capital gain occurred late in the year, the annualized income method may eliminate or reduce any estimated tax penalties.    

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