Another rental sale question

Forum|Forum|3 years ago
August 15, 2022
1 reply
0 views

I got some good feedback on another post but wanted to clarify this

*$500k income with federal withholding from paychecks

*sold rental with a 300k long term gain this month

i know about recapture and the brackets and adjusting basis and all that

i just want to make sure I don’t have to fork over a huge chunk of money before the end of 2022….my current plan is to make sure I have 110% of 2021 taxes withheld and have TurboTax guide me thru the rental sale taxes when I complete 2022 taxes in early 2023….is that right in order to avoid a penalty? Thanks

Best answer by Anonymous_

@jonpagel wrote:
my current plan is to make sure I have 110% of 2021 taxes withheld..

Yes. Given the facts you presented, you need to pay 110% of your 2021 income tax liability in order to avoid an underpayment penalty.

Anonymous_Answer

Employee

@jonpagel wrote:
my current plan is to make sure I have 110% of 2021 taxes withheld..

Yes. Given the facts you presented, you need to pay 110% of your 2021 income tax liability in order to avoid an underpayment penalty.

jonpagelAuthor

Employee

Ok thanks…and it is literally just 110% of the federal withholding line on my paycheck? I’m probably making more money this year from my employer so they will withhold more because of that but it is just 110% of 2021 federal withholding regardless if my job income increases this year right? That should actually help because it there will be more withholding due to that to push me over last year…I’ll Have them withhold some extra as well… Thanks !