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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16547
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I regularly pay estimated taxes for my wifes business. In

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I regularly pay estimated taxes for my wife's business. In addition, I recently sold some long term stock incurring a sizable long term capital gain. Am I required to pay the 15% on the entire gain in the quarter that I sold the stock (to avoid penalties), or can I spread the amount owed among the remainder of the quarterly payments (2)?
The question applies both to Federal and to NJ state tax.

Thanks.

Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

Typically when you file estimated tax return, you pay for the tax on the gain in the year of the actual gain

Customer:

So does the 15% on the amount just get added to the amount of tax I estimate I will owe for the year, and I can spread that across the remaining quarters?

Customer:

(which in this case is 2, Sep 15 and Jan 15)

Megan C :

Yes, the 15% adds for the year, but you pay the 15% in the quarter of the sale

Megan C :

you don't spread it

Customer:

Is it the same for the state of New Jersey? 1 payment of the tax added from the sale in the quarter that I sold?

Megan C :

That is correct

Megan C :

Federal and state are the same

Customer:

1 more extension - I know it would be easy and great to have the same quarterly payment each quarter

Customer:

but my wife's income is variable (self employed), so I end up changing the estimate of how much she will make, and therefore how much we pay each quarter.

Customer:

This is okay, right?

Megan C :

That is perfectly fine

Megan C :

that's why it's called "estimated' tax payments

Customer:

Excellent. You have answered my question.

Customer:

Thank you !

Megan C :

You're welcome. If you would, please rate my response as "excellent" so that I may receive credit for assisting you today

Customer:

I was just making sure, since the form they provide always assume equal payments..

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Thanks for your positive rating. Please come back and visit MyVirtualCPA for any of your tax, finance, or social security needs. It was a pleasure working with you today.

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