do you have to make estimated payments on capital gains?
 

i sold some stocks for long term capital gains at the beginning of the year... was i required to make estimated payments on these earnings?

Re: do you have to make estimated payments on capital gains?
 

no

Re: do you have to make estimated payments on capital gains?
 

if self employed you are required to pay quarterly est. tax payments. to not have penalties you need to pay in what you paid in taxes for the previous year or the amount of your current year tax. in general with some exceptions.

Re: do you have to make estimated payments on capital gains?
 

The more you pay now, the less it hurts later.

Re: do you have to make estimated payments on capital gains?
 

[ QUOTE ]
no

[/ QUOTE ]

I thought this was correctc – I’m a bit rusty:

Your estimated payments are based on your last year’s tax. You have to have a certain % of last year’s amount paid in the current year. E.g. last year tax = $25,000. Say the % is 90 – I forget the required % - you have to make estimated payments of $22,500.

It doesn’t matter how this year’s income tax amount is figured. If you end up owing 50k tax this year, say in all capital gain, you still should have made the 22,500 (don’t have to pay the 27,500 until 4/15/08.

Per Ray Zee, it seems the estimate is based on 100% of last year - that is probably right, it used to be a %.

Re: do you have to make estimated payments on capital gains?
 

[ QUOTE ]
Per Ray Zee, it seems the estimate is based on 100% of last year - that is probably right, it used to be a %.

[/ QUOTE ]

Yes, although if your income is high (north of $150K, I think?) they expect 110% of last year's tax burden or 100% of this year's tax burden, whichever is less.

Re: do you have to make estimated payments on capital gains?
 

[ QUOTE ]
[ QUOTE ]
Per Ray Zee, it seems the estimate is based on 100% of last year - that is probably right, it used to be a %.

[/ QUOTE ]

Yes, although if your income is high (north of $150K, I think?) they expect 110% of last year's tax burden or 100% of this year's tax burden, whichever is less.

[/ QUOTE ]

The safe harbor rule you are referring to, in lieu of quarterly payments, is that through withholdings, you must pay 110% of last year's liability, or 90% of actual.