estimated payments

amphibithen

I recently had a stock sale with a sizable profit. In the past when this event occurred, I would adjust my w2 withholding to withhold more taxes so my end of year amount due was close to $0. Unfortunately earlier this year, I lost my job so that is not an option.

If I want to make an estimated payment, based on tax bracket and expected due from my stock sale, do I just use the IRS website (https://www.irs.gov/payments/online-account-for-individuals)? Or are there special forms needed prior to making estimated tax payments?

AnnieB

Hello,

Thanks for your question. Yes, you can make an estimated tax payment through your online IRS account, and no special forms are needed beforehand. Simply calculate your estimated tax amount and submit your payment.

To estimate your tax liability from the stock sale, use the Qualified Dividends and Capital Gains Worksheet in Publication 505. This will help account for the typically lower tax rates on net capital gains compared to ordinary income. Making the payment promptly will help you avoid penalties for underpayment.

To read more, visit this IRS FAQ about Pay As You Go.

Visit a discussion on Estimated Taxes here.