I am easing into retirement this year. As part of the process, I sold a substantial quantity of stock which was in a non-sheltered Vanguard account. (In hindsight, I could have saved myself both taxes and grief if I had done what needed to be done within my 401k and left my "free world" funds alone).
A friend informed me that I would probably owe short term capital gains tax at about 10%, and that I would be required to pay estimated taxes this quarter. I am someone who has always kept my IRS interactions very simple; although I work as a contract employee, I have always worked for employers who withhold all taxes, and I keep my withholding high enough to avoid nasty surprises at the end of the year. I have never prepaid estimated taxes before.
Earlier today I went to the IRS website to look for the forms relevant to estimated tax payments. To me, it was a horror show; the forms were asking a variety of questions which I have no answers for, such as my income for the rest of the year (my Social Security payments are knowable, but my retirement planning is based in part on a dividend stream, which is tentative / theoretical so far, and I also might choose / need to work some if my health permits).
The Vanguard website isn't very informative, since, in their words, "You currently have no eligible holdings for cost basis method election". (They kind of have a point there.)
I thought this would be about filling out a one page worksheet saying, "Here's what I sold, here's what they paid me, here's your money." No such luck. Am I going to need a tax professional to get out of this?
A friend informed me that I would probably owe short term capital gains tax at about 10%, and that I would be required to pay estimated taxes this quarter. I am someone who has always kept my IRS interactions very simple; although I work as a contract employee, I have always worked for employers who withhold all taxes, and I keep my withholding high enough to avoid nasty surprises at the end of the year. I have never prepaid estimated taxes before.
Earlier today I went to the IRS website to look for the forms relevant to estimated tax payments. To me, it was a horror show; the forms were asking a variety of questions which I have no answers for, such as my income for the rest of the year (my Social Security payments are knowable, but my retirement planning is based in part on a dividend stream, which is tentative / theoretical so far, and I also might choose / need to work some if my health permits).
The Vanguard website isn't very informative, since, in their words, "You currently have no eligible holdings for cost basis method election". (They kind of have a point there.)
I thought this would be about filling out a one page worksheet saying, "Here's what I sold, here's what they paid me, here's your money." No such luck. Am I going to need a tax professional to get out of this?
Statistics: Posted by Phred75 — Wed Jul 24, 2024 9:41 pm — Replies 5 — Views 364