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Estimated taxes

Forum|Forum|4 years ago
February 13, 2022
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I am retired and I generally pay estimated taxes but that is due to selling off a block of stock once a year rather than planned/scheduled income.

This year I sold in early February. My estimated taxes are quarterly but if it is supposed to be pay as you go shouldn't the entire estimated amount of taxes on my capital gains be paid in the first quarter?

Best answer by Vanessa A

Since you sold the stock in February you should make the additional payment with your first quarter payment instead of spreading over the four quarters.

Taxes are supposed to be paid in the quarter the income is earned or received.

Critter-3

Yes it should if you use the annualized method as opposed to the safe harbor method.

The following is the general rule:

You must pay estimated tax for 2022 if both of the following apply.

You expect to owe at least $1,000 in tax for 2022 after subtracting your withholding and tax credits.
You expect your withholding and tax credits to be less than the smaller of:
1. 90% of the tax to be shown on your 2022 tax return, or
2. 100% of the tax shown on your 2021 tax return. Your 2021 tax return must cover all 12 months.

Note: If your AGI for 2021 was more than $150,000 ($75,000 if your filing status for 2021 is married filing a separate return), substitute 110% for 100% in (2b)

S

snufugalAuthor

I know I have to pay estimated taxes for 2022. That was not my question. I sold some stock in February and it is markedly higher than blocks of stock sold in prior years which I generally sold at the end of the year.

The estimated amount on the estimated tax voucher is not likely to be enough should I pay the additional amount spread over the 4 payments or add what I feel the shortfall would be and add to the first quarter payment.

V

Vanessa AAnswer

Since you sold the stock in February you should make the additional payment with your first quarter payment instead of spreading over the four quarters.

Taxes are supposed to be paid in the quarter the income is earned or received.

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