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March 25, 2024
Question

Can I have help to estimate next year taxes due to a special situation?

  • March 25, 2024
  • 2 replies
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Planning to sell my house in 2024, can I have help right now to estimate my capital gain taxes?

2 replies

Employee
March 25, 2024

If your gain was more than  $250,000 filing Single, or more than $500,000 filing Married Filing Jointly the sale must be reported on your tax return.  Whether you re-invested the gain in to another house is irrelevant.  If you  have a Form 1099-S go to Federal>Wages and Income>Less Common Income>Sale of Home (gain or loss)

If you owned and lived in the home as your primary residence for at least 2 of the last 5 years on the date of the sale, you do not have to report the home sale if the gain is less than $250K filing Single, or less than $500K filing Married Filing Jointly (and you both owned and lived in the home for at least 2 years).

  • If you are using online TT, you need Premium software to report the 1099-S

 

 

NOTE:   If you have ever used the home as rental property or claimed a home office, you have more information to enter

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
March 25, 2024

there are methods you can use to avoid penalties for underpaying taxes for 2024 if there will be a taxable gain or even if there isn't. This assumes you would be comfortable if you had to come up with $$$$ when you file your 2024 return in 2025.

^^^^^^^^^^^^

 There will be no federal penalties for not paying enough taxes during 2024 if withholding and

  1. timely estimated tax payments equal or exceed 90% of your 2023 tax or
  2. timely estimated tax payments equal or exceed 100% of your 2023 tax (110% if your 2023 adjusted gross income was more than $150K) or
  3. the balance due after subtracting taxes withheld from 90% of your 2023 tax is less than $1,000 or
  4. your total taxes are less than $1,000

 

for federal purposes (and probably state as well) the default is 1/4 of your annual withholding is deemed paid each tax period (1/1-3/31, 4/1-5/31, 6/1-8/31, 9/1-12/31) but if you can prove actual withholding for 1 period you can use it but then must use actual for all periods.  Estimated tax payments only count when received. so a sale late in the year with a taxable gain under the default penalty calculation method (1/4 of your annual taxes is due each period even if all your income is earned in the fourth period) would likely result in penalties for the earlier periods. The only way around this is to use the annualized income installment method. Review page 3 of the Form 2210 to see what's involved in the method.

https://www.irs.gov/pub/irs-pdf/f2210.pdf 

state laws differ