do i pay at the end of the year or when I sell it? I heard that if you make money in the market and didnt pay taxes on it by the end of the year the IRS will charge you interest and you would get penalized. Is that true?
2007-04-11 08:05:19 · 5 answers · asked by killer_cat_85 1 in Business & Finance ➔ Taxes ➔ United States
You make a "projection" or an estimate of your gains and losses for the year,
and generally, pay your taxes in on a quarterly basis (1040-ES).
Instead of wasting your valuable time during the year in calculating the cost of
taxes, Federal and/or State, pay in 110% of your last years tax during the current year.
No matter how much more your income is in any one year, even an increase of ten million dollars, as long as you pay in 110% of your prior years tax in the current year (on a quarterly basis), the IRS cannot assess you penalties or interest.
2007-04-11 08:24:58 · answer #1 · answered by bold4bs 4 · 0⤊ 0⤋
The 2010 tax forms and instructions will not be available until the end of the year 2010. So the below information for the 2009 1040 schedule D is all that is currently available and some of the information could change by that time so just keep updated on this after the middle of January and when you receive the 1099-B for the sale of the stock that you received as a divorce settlement in the year 2011 when you will have to report the sale of the stock on your 2010 1040 federal income tax return. It is possible that you may find some cost basis information some where on one of the pages of the information that will be included in the envelope with the 1099-B page or maybe issuer of the 1099-B or company can help you determine the cost basis if when you need it. Hope you find the above enclosed information helpful for your situation and good luck to you.
2016-05-17 21:22:18 · answer #2 · answered by lessie 3 · 0⤊ 0⤋
It depends on how much you sell - if it's a lot of gain, then you might have to make quarterly estimated payments during the year.
If at the end of the year you've paid in at least what your total tax liability was the previous year, or if you owe less than $1000, you won't be penalized - otherwise you might be.
2007-04-11 10:41:27 · answer #3 · answered by Judy 7 · 1⤊ 0⤋
It depends you should contact your tax preparer when you sell the stock. Depending upon your circumstances at the time of the sale you may need to pay estimated taxes. If you are required to pay the estimated taxes and you do not then you can be penalized for not paying timely.
2007-04-11 08:11:23 · answer #4 · answered by nyteglori 3 · 0⤊ 0⤋
Unless the taxes are excessive I would say just pay them at the end of the year. There could be a penalty if you do not pay at least your previous years tax and owe more than 1000 dollars.
2007-04-11 08:14:25 · answer #5 · answered by Anonymous · 0⤊ 0⤋