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How much do i owe the IRS on Sept 15th for income received in September?

Personal Finance & Money Asked on August 12, 2021

Sold a house at end of August.
Cap gains of about $240k to $375k (federal + California) income tax will be due.

How much should I pay Sept 15th, 2020?

One Answer

You might not have to pay them anything until April 2021.

The key is to make sure that you meet the IRS safe-harbor rules. If you make sure that through withholding and quarterly payments you have submitted to the IRS 110% of last years taxes, then you skip any penalties and interest related to this big capital gain.

I did this the last time I sold a house. It was a rental, and I couldn't get a close estimate of the impact with depreciation, recapture, and capital gains. So I made sure I had enough withheld from my job to make the safe-harbor. Then I sent the balance the following April.

You will have to see what California requires.

Correct answer by mhoran_psprep on August 12, 2021

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