I cashed in some of stock holdings. If I don't do anything now, I suspect I will own IRS quite some money next April. So how can I make a payment now? I don't want to change my monthly deduction from my salary or have my broker withholding money for tax. So is there any other ways to pay off the capital gain now instead of next year?
2007-10-17 13:53:58 · 7 answers · asked by ww 3 in Business & Finance ➔ Taxes ➔ United States
First off, you need to see how much PROFIT you made on the stock holdings. The difference between what you paid and what you sold them for is the gain and only that is taxed. If you have a loss, it will actually REDUCE your taxable income for the year, at least up to $3,000.
Once you've figured out how much PROFIT you have you need to figure it if is long term or short term. Short term gains (stocks held for 1 year or less) are taxed as ordinary income at your marginal rate. Long term gains are taxed at 15% unless your margainal rate is 15% or less where they're taxed at only 5%.
Now that you have some idea what your tax liability might be for the stock sale you can make an estimated payment using Form 1040-ES. The deadline for that payment will be Jan 15, 2008. However if the excess tax you owe is less than $1,000 you can safely hold off until April 15th and pay it then since there won't be any penalties for underpayment of tax. Just set the extra money aside in an interest bearing account until you have to pay and get a few extra $$$ for yourself.
2007-10-17 14:30:00 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 0⤋
Uh, if it's under the table, technically the government doesn't know how much you're making whether it be $30 dollars or $3000. Legally you are supposed to report this and pay taxes yourself but if you don't then you won't have to even if it were like $30,000. If it is being done legally, I believe the amount where you have to pay taxes on may start at a lot lower than $3000. Go to the IRS website and check for FAQs or something where it has "Do I have to pay taxes?" and it should tell you the minimum amount where you have to start filing.
2016-05-23 06:01:32 · answer #2 · answered by ? 3 · 0⤊ 0⤋
File a quarterly estimated return and pay what you think you'll owe. The next deadline is January 15, 2008, and that's the final time for 2007 taxes.
The form you'll need is 1040ES. You can download it at irs.gov
2007-10-17 15:00:07 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
Probably, but why not put it in your savings account and earn some interest until April?
2007-10-17 13:58:30 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Yes, there is something called estimated payments. Check IRS.gov.
2007-10-17 13:57:23 · answer #5 · answered by arkleseizure 3 · 1⤊ 0⤋
just put aside about 15% of the profit and have it handy come tax return time
2007-10-17 14:07:02 · answer #6 · answered by Anonymous · 0⤊ 0⤋
ask the IRS () or use their web site( to get a 1040ES
2007-10-17 14:32:29 · answer #7 · answered by TedEx 7 · 0⤊ 0⤋