Pay Quarterly Taxes 2024

[techie353]

After I pay my taxes for 2023, I may sell stock this year 2024 and anticipate I will need to pay taxes quarterly so I don't get hit with penalties. Can I use TurboTax 2023 to assist in generating estimated taxes for 2024? If so, how would I do this?

[ee-ea]

To avoid under payment penalties on the 2024 tax return.

Total Tax is line 24 of the 2023 return.

On March 30

Multiply Total Tax by 25% or 27.5% *[ * if line 11 of the 2023 return is over $150K or 75K if filing MFS]

Subtract cumulative withholding. Difference is the amount to pay as first quarter estimate by April 15.

On May 31

Multiply Total Tax by 50% or 55% *

Subtract cumulative withholding. Difference is the amount to pay as second quarter estimate by June 15.

On August 31

Multiply Total Tax by 75% or 82.5% *

Subtract cumulative withholding. Difference is the amount to pay as third quarter estimate by September 15.

On December 31

Multiply Total Tax by 100% or 110% *

Subtract cumulative withholding. Difference is the amount to pay as fourth quarter estimate by January 15, 2025. File and pay by January 31 to avoid paying this quarterly.

[techie353]

Can you clarify my thoughts ....  you said:

On March 30

Multiply Total Tax by 25% or 27.5% *[ * if line 11 of the 2023 return is over $150K or 75K if filing MFS]

Subtract cumulative withholding. Difference is the amount to pay as first quarter estimate by April 15.

25% * [$200,000] - [cumulative withholding] = Amount to pay for QTR1

What is cumulative withholding?

Is cumulative withholding, Federal taxes withheld only for the first quarter? 

Would I need to pay State and Local taxes quarterly?

25% * [$200,000] - [first quarter cumulative withholding]

25% * [$200,000] - [$9000] = $41,000 due?

However, I do not know yet what my short term capital gains amount will be until I sell my stock.

It may not be $41,000. This doesn't make sense....

[LeticiaF1]

Yes, TurboTax will help you figure out how much if any estimated payments you should make.  As you prepare your 2023 return TurboTax automatically calculates if you need to make estimated payments for 2024.  If your information from 2023 does not trigger the estimated payments, you should:

1. Open your tax return
2. Search for 1040-es (be sure to include the dash) and select the Jump to link.
3. Answer No to the question Do you want to change your W-4 withholdings for 2024?
4. Answer the questions about things like your 2024 filing status, income, and deductions.
5. Eventually, you'll come to the Print Vouchers? screen. Answer Yes and we'll include your 2024 1040-ES payment vouchers when you print a copy of your return later.

If when you are done it shows No Payments, it means that based on the information that you entered, you do not need to make estimated payments for 2024 you don't need to make 2024 estimated payments based on what you entered.  

If you do not know what your numbers will be you can use estimated amounts as you answer the questions.  You can also go back to your return and figure this out when you know what your capital gains will be.  

@techie353 

[techie353]

I just tried the TurboTax software to assume a $40k short term gain and it is estimating low on how much I should pay. I would prefer to pay closer to what should be owed so I looked at the my Fed tax brackets for this.

How do I estimate NY State and Local Quarterly Taxes? I would imagine the same way, by my tax bracket. Can someone explain further? 

[Vanessa A]

You can use the 2023, NYS tax table here to figure out your 2024 estimated taxes.  There is also a NYS tax computation worksheet you can click on in that link.  This should help you figure out how much you will owe.  It does not appear that the 2024 tables are available yet. 

As for your local taxes, each jurisdiction has a different tax rate and tax method.  You would need to contact your local taxing authority to find out what your withholding rate is.