Do capital gains from a stock sale have to be paid on a quarterly/semi-annually/whatever period or can you wait until to file your taxes?
Do capital gains from a stock sale have to be paid on a quarterly/semi-annually/whatever period or can you wait until to file your taxes? All income is subject to requirements for Form 2210, Underpayment of Installment Taxes and Penalties. Get a copy, and its instructions. The only thing unique about capital gains is the rate of tax on them.A suggestion: If you also have a salary with taxes withheld use overwithholding in December, if necessary, to satisfy a safe harbor of the least of 100% (105%) of 1998 taxes, or 90% of 1999 taxes, or at maost $1,000 less than 1999 taxes.If that doesn't work for you, get a 1999 2210 tax calculator to compute the installments as they come due. Although you can try to do it yourself, learning how isn't worth the trouble so most people just paid 4 equal installments totalling last year's tax because generally their income was increasing. In many cases where you had a big jump in income last year this overpays, but you could at least use the 2210 Short Method with no penalty. Although the IRS tells you how to compute uneven installments in Publication 505, it's somewhat misleading, confusing, and inadequate. Don't try--get a calculator if the other methods don't work. Ed
[[ Do capital gains from a stock sale have to be paid on a quarterly/semi-annually/whatever period or can you wait until to file your taxes?]]It depends upon a number of issues. I would suggest that you read my post on estimated taxes in the Taxes FAQ area, which explains this issue in much more detail. In addition, we spend a BUNCH of time explaining this issue in the TMF Investment Tax Guide...which was written for newbies in mind. You might want to check it out.TMF TaxesRoyWant to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Don't be the LAST one on your block to own this masterpiece, since it's sellin' fast. Remember: It's never to early to start planning for your 1999 taxes. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.
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