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Originally Posted by Rainger99
This is the first year that I have to pay estimated taxes.
99% of my income is social security, dividends, and capital gains.
I know what my social security will be but how do you estimate dividends and capital gains?
Last year, I think all of my capital gains came in the 4th quarter.
And am I supposed to pay in April for gains that don’t arrive until December? Does the IRS expect you to sell stock to come up with the money? How do you pay estimated taxes on income that you don’t have?
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Same here. I had to pay about a $100 penalty for underestimating taxes due because my interest, dividends, and capital gains were higher than anticipated. Yet on the years where I got a significant tax refund because I overestimated estimated taxes, I didn’t get a credit for giving the government an interest free loan.