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This June I received a "windfall" six-figure capital gain when…

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This June I received a...
This June I received a "windfall" six-figure capital gain when one of the companies in my stock portfolio was acquired. My original schedule of estimated IRA tax payments did not anticipate such a gain.
In order to avoid a penalty, how should I modify my estimated tax payment? That is, how much and when? I assume I will be paying the 20% cap gains rate plus the 3.X % surcharge.
(Some published sources say that if my estimated tax payments are at least 110% of the previous year, I would be in a "safe zone". Would this apply to my situation?)
Submitted: 3 years ago.Category: Tax
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7/2/2015
Tax Professional: emc011075, Tax adviser replied 3 years ago
emc011075
emc011075, Tax adviser
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Satisfied Customers: 3,979
Experience: IRS licensed Enrolled Agent and tax instructor
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Hi. My name is ***** ***** I will be happy to help you.
To avoid the underpayment penalty - the safe zone - you have to pay smaller of 90% of your current year taxable liability or 100% (110% if your income is 150K+) of your prior year taxable liability by the end of the year or with the last quarter estimate which is due January 15. So if you look at your 2014 tax return, as long as you pay 110% of line 63 by the end of this year or as the last estimated payment, you will be fine.
http://www.nolo.com/legal-encyclopedia/estimated-tax-penalities-how-avoid-underpaying.html
Let me know if you have any questions.
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Tax Professional: emc011075, Tax adviser replied 3 years ago
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