Jan
I have several stock mutual funds. Capital gains are unpredictable but when they are very high as they are this year I am very underwitheld and will be subject to penalties on my tax. Is there any way to compensate or deal with this?
Answer:
You'll know by the end of the year, at least approximately - if they don't send you a form when they do the distribution, you can most likely find it on their website or sign into your account. Estimated payments for the last quarter aren't due until Jan 15, so you can make your payment then. Yes, that's tomorrow.
Answer:
US?
You're ok as long as you paid at least 90% of the previous years tax. Just adjust your estimated taxes.
ESTIMATES DUE TOMORROW. Jan. 15.
Answer:
Listen to ed. file your estimated tax return if you may have to pay a penalty.
You need to plan before the year ends. For example if you are employed, you could file a new W4 form before December and specify to have an extra amount withheld from your pay. Whatever extra is withheld in December is viewed by the IRS as having been withheld evenly over the year. It's a good way of avoiding filing quarterly estimated taxes, and your money can earn interest instead of lending it the government tax free.
Answer:
There are 3 safe harbor exceptions that will avoid penalties.
1. Pay in at least 90% of THIS YEAR'S tax liability by Jan 15th using Form 1040-ES.
2. Pay in at least 100% of LAST YEAR'S tax liability by Jan 15th using Form 1040-ES.
3. Pay in enough by Jan 15th using Form 1040-ES that your tax liability on April 15th is less than $1,000.
Take your pick, but #2 is usually the easiest and safest way to avoid penalties this year. #3 will cost you the least in lost income on the money used to pay your taxes though.
Alternatively, file your return and paying any balance due by Jan 15th 2008, which is the due date of the final estimated payment for 2007.
In the future, reevaluate your tax position several times throughout the year and make estimated tax payments using Form 1040-ES as needed to keep you in one of the above safe harbor exceptions.
Answer:
Before you do anything, did you sell any of these funds? If not, then you have nothing to worry about. You only realize capital gains when you sell.