paying capital gain to avoid penalty

[zucc57]

Good day,

I am a salaried employee, and therefore do not pay any estimated tax throughout the year (have appropriate amount withheld from each paycheck).   

I am contemplating selling the shares of a mutual fund I've owned for over ten years and purchasing shares of a different fund.   

My questions:  1.  When I fill out federal taxes for 2023, and use TurboTax to sign in to the mutual fund company's website to obtain the necessary information, is it reasonable to assume that TurboTax will create the appropriate forms and correctly calculate the capital gains tax, or will that be something I will need to do manually?

2.  If I can estimate how much capital gains tax there will be,  how does one 'pre pay' that amount to the IRS so that I avoid a penalty?

Thank you

[TomD8]

Yes, TurboTax can create the appropriate forms and calculate the capital gains tax from the sale of mutual fund shares.

If you wish, you can make a federal estimated tax payment online at www.irs.gov/payments.  Be sure to designate your payment as an estimated tax payment for tax year 2023.

If your state has an income tax, you may also want to make an estimated state tax payment.  With most states, you can make online payments on the state's tax website.

You may want to review this IRS web page as well:

https://www.irs.gov/payments/underpayment-of-estimated-tax-by-individuals-penalty