Question

Estimated taxes

Forum|Forum|6 years ago
March 13, 2020
1 reply
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I normally do not make enough to pay taxes. But this year, 2020, I sold my house and will have capital gains.

1) since I did not pay any taxes for 2019 do I have to pay estimated taxes or pay them when I file 2020 taxes?

2) If I do have to pay estimated taxes should I pay all in first quarter or can I pay in 4 quarters?

First, be sure that you have a taxable gain. Then the earlier you pay the bulk of the tax, the better. If you can, top-load the payments. If not, make four equal payments. The worst thing to do is wait until the end.

If you meet the qualifications to use the exclusion, any gain over that amount is a capital gain. The exclusions are $250,000 for single, and $500,000 for married filing jointly. See the rules below.

Does Your Home Sale Qualify for Maximum Exclusion

The tax code recognizes the importance of home ownership by providing certain tax breaks when you sell your home. To qualify for these breaks, your home must meet the Eligibility Test .

How your sale qualifies. Your sale qualifies for exclusion of $250,000 gain ($500,000 if married filing jointly) if all of the following requirements are met.

You owned the home and used it as your main home during at least 2 of the last 5 years before the date of sale.
You didn’t acquire the home through a like-kind exchange (also known as a 1031 exchange), during the past 5 years.
You didn’t claim any exclusion for the sale of a home that occurred during a 2-year period ending on the date of the sale of the home, the gain from which you now want to exclude.