Question

Does Turbo Tax have a program for estimating quarterly tax payments after selling a house?

Forum|Forum|5 years ago
April 8, 2021
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TurboTax Premier Online

Yes, TurboTax can automatically calculate your estimated tax payments (Form 1040-ES) and print out payment vouchers for you to send to the IRS. The federal tax filing deadline for individuals has been extended to May 17, 2021. Quarterly estimated tax payments are still due on April 15, 2021. Quarterly estimated tax payments are due four times each year. The 1st payment is due 4/15/21, the 2nd payment is due 6/15/21, the 3rd payment on 9/15/21, and last quarterly payment for tax year 2021 is due on 1/15/2022.

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jeffkirk66Author

I got some help but not really what I needed. I sold my house in Feb 2021 and need to pay estimated taxes for 2021. I could not find TurboTax help for 2021 estimated taxes. I already sent in my 2020 return. So I did the estimated taxes the old fashion way: Figured it out myself.

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JohnW152

It may not be necessary for you to make estimated tax payments in this scenario.

According to the General Rule in the IRS's Publication 505, Tax Withholding and Estimated Tax,

In most cases, you must pay estimated tax for 2021 if both of the following apply.

1. You expect to owe at least $1,000 in tax for 2021 after subtracting your withholding and tax credits.

2. You expect your withholding and tax credits to be less than the smaller of:

a. 90% of the tax to be shown on your 2021 tax return, or

b. 100% of the tax shown on your 2020 tax return. Your 2020 tax return must cover all 12 months.

[Bolding is mine.]

I should point out that, in 2.b, the relevant percentage is 110% if less than two-thirds of your gross income for 2020 and 2021 is from farming or fishing, and your 2020 adjusted gross income was more than $150,000 ($75,000 if your filing status for 2021 is married filing a separate return. See the ** beneath Figure 2-A, Do You Have To Pay Estimated Tax? in the link above.

However, as pointed out in the excellent Post by TurboTax CHAMP Hal_Al,

If your goal is only to avoid the underpayment penalty, then paying 100% of the prior year tax liability is the “safe haven”. So, even if you make a third quarter payment, it doesn't have to be for the full amount. Increasing your withholding at work is a better option.

I'm assuming you're aware of the potential for an exclusion from income of the gain on the sale of a home. If not, please see Do I have to pay taxes on the profit I made selling my home? in the TurboTax article Tax Aspects of Home Ownership: Selling a Home.

Carl11_2

Employee

With 300K of capital gains, you're gonna be in the 35% tax bracket if single, possibly the 32% bracket if married filing joint.

You do not need a 1040-ES to pay estimated taxes to the IRS. You can go online "right now" at www.irs.gov/payments and make a payment online. If you do, I would suggest you send the IRS no less than 35% of your gain, and you'll be good come tax filing time assuming you already have sufficient with holding on other income you receive during the year.

If your state also taxes personal income then I would suggest you also pay estimated taxes to your state, at whatever the highest rate is that your state taxes personal income. You'll have to check with your state department of revenue to see what your options are, as not all states that tax personal income offer the ability to pay on line.

Don't worry if you overpay your tax liability. At tax filing time any over payment will be refunded to you on your 2022 tax return.

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Anonymous_

Employee

@Carl11_2 wrote:
Don't worry if you overpay your tax liability. At tax filing time any over payment will be refunded to you on your 2022 tax return.

I would worry because any overpayment is essentially an interest-free loan to the IRS.

Here is how to avoid an underpayment penalty:

Avoid a Penalty

To avoid a penalty, pay your correct estimated taxes on time.

You may avoid the Underpayment of Estimated Tax by Individuals Penalty if:

Your filed tax return shows you owe less than $1,000 or
You paid at least 90% of the tax shown on the return for the taxable year or 100% of the tax shown on the return for the prior year, whichever amount is less.