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R. Klein, EA
R. Klein, EA, Enrolled Agent
Category: Capital Gains and Losses
Satisfied Customers: 263
Experience:  Over 20 Years experience in resolving tough tax cases
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I sold my home and next year will have to pay capital gains

Customer Question

I sold my home and next year will have to pay capital gains on about $300,000. I have a 10.9 fed tax bracket and in California it is just 1.96. I am wondering how much I should pay in quarterlies this year. Thx, Marylyn
Submitted: 1 year ago.
Category: Capital Gains and Losses
Expert:  emc011075 replied 1 year ago.
Hi. My name is ***** ***** I will be happy to help you. with 300K in capital gains you will be in 33% federal tax bracket and the highest one in CA. What's your estimated other income and filing status?
Customer: replied 1 year ago.
Single with about $50,000 in income which is already taxed
Customer: replied 1 year ago.
What about federal income tax?
Expert:  emc011075 replied 1 year ago.
Thank you. Assuming standard deduction and no dependents, you will be looking at about 31K for CA and about 50,700 for IRS. The amount will be reduced by taxes already withheld from your paycheck by your employer. Your employer's calculation is based on 50k and much lower tax bracket so he most likely not withholding enough so you will have to account for it as well.
Customer: replied 1 year ago.
I will not be able to pay all of the quarterlies, so would it be better to owe the state or the feds? WhicH Is Easier To Deal With And cHARGES Less Penalty And interest?
Expert:  emc011075 replied 1 year ago.
Pay as much as you can, file your tax return next year and than request an installment agreement. It is easier to deal with IRS but consequences for not paying IRS are greater than not paying the state.
Expert:  emc011075 replied 1 year ago.
If you just sold the house and you still have the proceeds I would suggest to make a one large quarterly payment and pay what you can afford later.