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  • Underpayment tax concerns

    Hi everyone,

    So I was looking at my investment account and realized that I have about $20,000 of short term capital gains throughout the year. To decrease my tax burden, I have been using my 401k and have put in $16,000 this year. Therefore my income hasn't really changed, but my withholdings have gone down. I wasn't thinking about this till now. How can I calculate how much I'll owe the federal government and state government? If I send the payment now, before the year ends, will I be hit with an underpayment? I am concerned because I haven't been paying quarterly?

    Sorry for the dumb question, I am new to investing, still a resident, and find taxes to be super confusing.

    Any help would be much appreciated.

  • #2
    go learn about the concept of your “safe harbor” tax amount.

    this number should be easy to determine for you. Then, you can determine if you might be subject to penalty without further action now

    then come back with questions

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    • #3
      why is a resident generating 20K in STCG tax......?

      Comment


      • #4
        Originally posted by jacoavlu View Post
        go learn about the concept of your “safe harbor” tax amount.

        this number should be easy to determine for you. Then, you can determine if you might be subject to penalty without further action now

        then come back with questions
        I did look into that.

        If I am not mistaken, I don't qualify for this.

        1. I have not paid 90% of my total tax burden (paid taxes on 39k, but not on 20k).
        2. I thus far have paid less taxes this yr than last yr (not the same amount as last yr)

        ​​​​​

        Comment


        • #5
          Originally posted by Peds View Post
          why is a resident generating 20K in STCG tax......?
          Because I maxed out my roth IRA, put a lot into my 401k, have no loans, don't have a SO or kids.

          Therefore, I have a paycheck and don't know what to do with it. Since I work all the time, I don't have time to spend money. Then on my few days off, I have been reading up on companies, buying the news and selling the sentiments.

          Comment


          • #6
            Originally posted by Indest View Post

            I did look into that.

            If I am not mistaken, I don't qualify for this.

            1. I have not paid 90% of my total tax burden (paid taxes on 39k, but not on 20k).
            2. I thus far have paid less taxes this yr than last yr (not the same amount as last yr)

            ​​​​​
            so if your safe harbor is 100% of 2019 tax liability, then how far from that are you with YTD withholding?

            Comment


            • #7
              Originally posted by jacoavlu View Post

              so if your safe harbor is 100% of 2019 tax liability, then how far from that are you with YTD withholding?
              So are you saying that if I paid at least 90% of what I owed last year, then I should have no problems? Please pardon my ignorance.

              Comment


              • #8
                Originally posted by Indest View Post

                So are you saying that if I paid at least 90% of what I owed last year, then I should have no problems? Please pardon my ignorance.
                your safe harbor number by definition is the lowest number among the safe harbor options. You need to determine which applies to you.

                Comment


                • #9
                  Originally posted by Indest View Post

                  Because I maxed out my roth IRA, put a lot into my 401k, have no loans, don't have a SO or kids.

                  Therefore, I have a paycheck and don't know what to do with it. Since I work all the time, I don't have time to spend money. Then on my few days off, I have been reading up on companies, buying the news and selling the sentiments.
                  perfect time to spend some of that free time reading:
                  https://www.irs.gov/newsroom/the-bas...or-individuals

                  Comment

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