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Wendy Reed
Wendy Reed, Enrolled Agent
Category: Tax
Satisfied Customers: 3346
Experience:  15+ years tax preparation and tax advice.
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I have received $40000 of income dividends and $56000 of ...

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I have received $40000 of income dividends and $56000 of capitol gains in the past few days from an investment account with fidelity. I''m 65,self employed as a counselor and will have a small business loss for 2007. I live in North Carolina and have not anticipated this level of dividend income. What should I pay in federal and state estimated taxes on Jan. 15th to avoid any penalties when I file my return later in the year?
Submitted: 9 years ago.
Category: Tax
Expert:  Wendy Reed replied 9 years ago.

Hello there,

Since you state that you are self-employed, you probably do not meet the exceptions to the rule for paying estimated tax (which depend on withholding and credits).

It is difficult for me to figure your estimated tax without knowing your total tax situation. However, assuming that your business loss is your only other income (or loss), and assuming that the dividends are "qualified" and the capital gain is all long term, your approximate tax liability on this income (without the business loss and assuming standard deduction and single filing status), would be $3708. If cap. gain is short term and dividends are not all "qualified" the amount will be higher.

These are a lot of assumptions, and if they are mostly valid, I would pay at least 3000 to the federal gov. as est. payment for 2007. You will probably need to file an exception to the penalty form when you file your return assuming that the dividends and cap gain were all received in the last quarter rather than equally over the year.


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Customer: replied 9 years ago.
thank you
Expert:  Wendy Reed replied 9 years ago.

NO problem,

Best of luck!

Wendy Reed and other Tax Specialists are ready to help you