[AJ32162]

Originally Posted by Cheapbas

You must have done very well to be up in the 32% tax bracket (net $326k after deductions) I don’t think capital gains are quarter to quarter, it’s annually. so set the money aside in a safe place or use it to your advantage to make more money and sell any underwater investments before year end to offset the gains.

A quote from TaxAct Blog:

"When to make estimated tax payments

You should generally pay the capital gains tax you expect to owe before the due date for payments that apply to the quarter of the sale.

The quarterly due dates are April 15 for the first quarter, June 15 for second quarter, September 15 for third quarter and January 15 of the following year for the fourth quarter. When a due date falls on a weekend or holiday, your quarterly payment is due the following business day."

[NY2TV]

I can tell that a lot of the advice here is not from accountants. Those that told you that you can avoid a penalty by paying the previous year's tax liability failed to mention that if your 2020 Adjusted Gross Income was $150,000 or more, you need to have paid 110% of the previous year's tax liability. If I were you, I would contact a tax accountant for tax advice.

[lindaelane]

I have a feeling you are here because you do not want to pay a CPA.

I strongly suggest you do so, but if not, I have an alternative for you.

Go to Liberty Tax and start processing your 2020 return. They become your tax advisors. They are qualified, - at least meeting the minimum though a CPA more than meets it. But the advice is free and is from someone qualified to advise you. I've been using their tax advisor from NJ (where I moved from) for years. Of course, I do not have a sudden 82 K profit.

I kind of know what my tax advisor would tell me - find out your 2020 total income tax before March 31. Pay the less of one-quarter of that or the actual (not marginal) estimated tax on your 82K.

But...it is complex to find a good, safe estimate of your actual tax, which will be lower than your "bracket tax" (32 percent for you). So to be perfectly safe, probably just pay the 32 percent to take first quarter tax you owe, in fact, to pay slightly more than you own and then get a refund next year.

But what I said is not tax advise. Talk to a qualified advisor. Everyone's situation is different. Best wishes.

[DAVES]

Originally Posted by FG111

Hello -
Like most here, I'm just sitting at home playing the stock market with little to no knowledge of how the market works. This last month, I got VERY lucky with $GME, $UVXY & $OZSC. On my cash account I had some spare money, gambled and profited 82K this month.
Do I take 32% and pay my tax on my next quarterly federal tax payment or wait till the end of the year or just pay it now ? Also, I lost last year about 10K in the market. Can I carry the loss into this years gain ?

Yes, of course I will ask my tax preparer, but just asking how others would handle this.
Thxs

I have no idea why people ask this sort of question on Talk of the Villages. If, there are any problems due to what you chose to do I can promise you but someone on Talk of the Villages said ........... will not save you from any penalties.

My understanding, you must pay as much as the previous year. So if, you had a large gain this year, you do not need to pay any more than you did last year until the end of the year. You say you had an 82,000 gain. You should know if it was a long term or a short
term gain. If, short term it is taxed at your ordinary income rate. An 82,000 gain may put you into a higher bracket. If, your top bracket was 30% last year you will need to have 25000 in cash to cover the tax on that gain. If, it was a long term gain the tax rate is 15% at most.

You say you have an accountant. It would be wise to talk to them. If, you owe 25,000 or possibly more. Money sitting in a money market is not earning you anything. You, depending on how disciplined you are might choose to divide the tax due by four and pay it 1/4ly.

[Villages Kahuna]

Never go to bed owning any of the types of stocks you’ve profited with. That’s why they call people who trade these stocks Day Traders!

But now that you’ve been supremely lucky, take a lot of your money off the table and call a good tax advisor.

[DAVES]

Originally Posted by FG111

Hello and thxs for reply -
I thank you for your words, but my gain isn't that much considering that several of my friends have killed the market for the past four months.
I'm glad that I finally made more in the market than at Santa Anita & Gulfstream.

For what it is worth, I find when people talk about money, it is not truth. I find that often people do not know so do not state truth. I like that my brokerage statement shows clearly what I made compared to the S&P average. The S&P over the past 6 months was up 16%, and that includes last week where it lost 3.31%

The math is interesting. Ask many people if, you have 10,000 and you made 10% the first year and lost 10% the next what would you have. Anyone who said 10,000 you are wrong. 10,000+10%=11,000 11000-10%=9900 100 vanished. To get back to your original 10,000 you need to make 9900+1.2%10,018. We all read that gains compound
so do losses. You will almost never read that reality. The same reality works with ten dollars, ten million or whatever.

The TAXMAN, I am amused. If, you have an IRA or a ROTH IRA one is supposed to grow tax free till you take out the money or are forced to. The other you paid the tax and it is supposed to grow tax free. Interesting on either you pay a TAX to our government on every stock sale. This TAX is called a fee. A rose by any other name...........

[FG111]

Originally Posted by jcreason5616

I think it makes a lot of sense that you came here and asked for some guidance on this matter. As a lifelong business owner, I benefited greatly from seeking some dialogue with other individuals before I sat down with my tax accountant or attorney. When they spoke and gave me advice, I felt like I had a better handle on what they were telling me and understood the options they were presenting because I had spoken ahead of time with other knowledgeable individuals. It gave me time to prep and have good questions for my tax preparer rather than having to think on the fly while I was on their dime. I think it made perfect sense that you thought some advice from people on this forum. I enjoyed reading the knowledgeable advice. I think the snarky people need to get a life.

Thank you for your reply and thank you for articulating my exact point that many here in this community have a great deal of life experiences that can be shared to others.
Yes, I do have a CPA. Yes, I do have a tax attorney. Yes, I do have a full service commissioned stock broker. Yes, I have a personal banker. Yes, I am not (gambling) with my retirement accounts but with a small 100K cash account just to play the stock market "ON MY OWN". Luckily, I made a few bucks and I realize that I may give it all back, but at least I having fun. There are many traders this last week who are making more in $GME & $AMC in a week than they can working for the next three years.
BTW - Killing it on $LODE and I received the buy recommendation from a poster on reddit, who may be some kid with no experience what so ever. Thanks again

[Boomer]

Originally Posted by Villages Kahuna

Never go to bed owning any of the types of stocks you’ve profited with. That’s why they call people who trade these stocks Day Traders!

But now that you’ve been supremely lucky, take a lot of your money off the table and call a good tax advisor.

Villages Kahuna’s advice above is the real advice needed here. But my guess is that the fever of the moment will cause this good advice to be ignored.

I don’t know why, but I get the feeling the OP could be relatively young and/or maybe just wants to ”wow” us. I was not going to bother this morning. But I am avoiding what I should be doing and hanging out on TOTV instead, so here goes:

I was young once. (sigh)

And, in my younger days, I was a bubble dancer. Ohhhhh, how I danced with that tech bubble. In those days, it was with select tech mutual funds. I did not think tech could ever lose. I would come home, flip on the business news — on the big, deep television, in its big wooden cabinet — and I would revel in my “brilliance.” But it was not brilliance. It was hubris. I got burned. But I learned.

Fortunately, I had not bet the farm — just the butter and egg money.

There are young people now betting their student loan money. That is nothing new. I knew someone who did that more than a decade ago. But it is suddenly more widespread.

My experience of what happened when I “flew too close to the sun” did not make me give up on the market. It just taught me to be a boring investor, looking at actual fundamentals and dividend histories.

Speaking of bubbles, I knew the housing crisis had to happen — drive-by appraisals and stated-assets loans and derivatives — and what a mess it was. (We are a nation of amnesiacs.)

This current insanity might be interesting to watch — including the psychology of it. This morning I saw somebody on television all worried about the psyches of the young people who are driving this.

There is definitely a fascinating psychology to it. Many who are a part of this thing are in the “everybody gets a trophy” generation, so I doubt that they will take any advice to flee to safety with their profits.

Also, there are those, of all ages, who just plain like to gamble — to the point of addiction — and here it is, at their fingertips, 24/7.

I never knew much of anything about hedge funds. I have learned a little in the past few days. They only take in big money individuals. But I keep wondering how many pension funds are into hedge funds.

Unrestrained greed never ends well.

Cassandra Boomer

[FG111]

Originally Posted by Boomer

Villages Kahuna’s advice above is the real advice needed here. But my guess is that the fever of the moment will cause this good advice to be ignored.

I don’t know why, but I get the feeling the OP could be relatively young and/or maybe just wants to ”wow” us. I was not going to bother this morning. But I am avoiding what I should be doing and hanging out on TOTV instead, so here goes:

I was young once. (sigh)

And, in my younger days, I was a bubble dancer. Ohhhhh, how I danced with that tech bubble. In those days, it was with select tech mutual funds. I did not think tech could ever lose. I would come home, flip on the business news — on the big, deep television, in its big wooden cabinet — and I would revel in my “brilliance.” But it was not brilliance. It was hubris. I got burned. But I learned.

Fortunately, I had not bet the farm — just the butter and egg money.

There are young people now betting their student loan money. That is nothing new. I knew someone who did that more than a decade ago. But it is suddenly more widespread.

My experience of what happened when I “flew too close to the sun” did not make me give up on the market. It just taught me to be a boring investor, looking at actual fundamentals and dividend histories.

Speaking of bubbles, I knew the housing crisis had to happen — drive-by appraisals and stated-assets loans and derivatives — and what a mess it was. (We are a nation of amnesiacs.)

This current insanity might be interesting to watch — including the psychology of it. This morning I saw somebody on television all worried about the psyches of the young people who are driving this.

There is definitely a fascinating psychology to it. Many who are a part of this thing are in the “everybody gets a trophy” generation, so I doubt that they will take any advice to flee to safety with their profits.

Also, there are those, of all ages, who just plain like to gamble — to the point of addiction — and here it is, at their fingertips, 24/7.

I never knew much of anything about hedge funds. I have learned a little in the past few days. They only take in big money individuals. But I keep wondering how many pension funds are into hedge funds.

Unrestrained greed never ends well.

Cassandra Boomer

Day Trading Rule # 1 - Never risk more than you are comfortable loosing.
Day Trading Rule # 2 - Never fight the tape; (go with the flow)
Day Trading Rule # 3 - See # 1.
Day Trading Rule # 4 - Day trading should be like your first sexual experience. In and out quickly, then celebrate with a cheeseburger,
fries and a pop.

[kens613]

Yes that is what I also thought the ruling is... Why pay on undetermined income until you know what it will be at the end of the year.. I always figured my quarterly payments based on last years taxes paid without being liable for a penalty the following year!

[AJ32162]

Originally Posted by FG111

Thank you for your reply and thank you for articulating my exact point that many here in this community have a great deal of life experiences that can be shared to others.
Yes, I do have a CPA. Yes, I do have a tax attorney. Yes, I do have a full service commissioned stock broker. Yes, I have a personal banker. Yes, I am not (gambling) with my retirement accounts but with a small 100K cash account just to play the stock market "ON MY OWN". Luckily, I made a few bucks and I realize that I may give it all back, but at least I having fun. There are many traders this last week who are making more in $GME & $AMC in a week than they can working for the next three years.
BTW - Killing it on $LODE and I received the buy recommendation from a poster on reddit, who may be some kid with no experience what so ever. Thanks again

You have all these financial resources available who could answer your very basis tax question with a simple phone call, yet you have chosen to solicit advice from unknown laypersons on a public forum. I am left scratching my head as to why.

[retiredguy123]

Originally Posted by NY2TV

I can tell that a lot of the advice here is not from accountants. Those that told you that you can avoid a penalty by paying the previous year's tax liability failed to mention that if your 2020 Adjusted Gross Income was $150,000 or more, you need to have paid 110% of the previous year's tax liability. If I were you, I would contact a tax accountant for tax advice.

Thanks. I didn't know about that rule, but TurboTax does. I also think that TurboTax knows a lot more about the tax rules than any tax preparer, and makes fewer errors.

[FG111]

Originally Posted by AJ32162

You have all these financial resources available who could answer your very basis tax question with a simple phone call, yet you have chosen to solicit advice from unknown laypersons on a public forum. I am left scratching my head as to why.

Now as a Village resident, you no longer scratch your head when confused, rather you
supposed to scratch your xxxs.

[Tdroels]

How do you trade at 4 a.m.?

[FG111]

Originally Posted by Tdroels

How do you trade at 4 a.m.?

Heavily traded stocks on NYSE start with pre-market trades @ 400am and after hours
goes until 800pm each day that the market is open. Trading outside the normal 930-400 is very risky and considered day trading.