Capital Gains

Forum|Forum|1 year ago
August 28, 2024
1 reply
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If I’m incurring capital gains on a somewhat regular basis, do I need to pay tax on that quarterly or can I do it all at once when I file?

marctu

So let's start here Who must pay estimated tax :

Individuals, including sole proprietors, partners, and S corporation shareholders, generally have to make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed.

So, if the capital gains are significant you may need to make estimated tax payments. Short-term gains are taxed at your marginal income tax rate, but long-term capital gains (Assets held for a year or more) are taxed as follows:

Tax rate	Single	Married filing jointly
0%	$0 to $47,025	$0 to $94,050
15%	$47,026 to $518,900	$94,051 to $583,750
20%	$518,901 or more	$583,751 or more

If the capital gains are all long term, you would need at least $5,000 in capital gains to have estimated tax liability assuming your adjusted gross income is significant. If you have a W-2 job, I I often advise clients to adjust their Form W-4

Thank you for the question @Foodfight

Be well and safe!

Marc T.

Turbo Tax Expert

27 Years of Experience Helping Clients

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