I have an extesion to file until June 15, so I am not in the penalty area. However I just noticed that I had an unexpected capital gain in December. I realize that I will have to pay interest on my underpayment of estimated tax since then, but what form can I fill out to prevent the IRS from considering it spread out for the whole year?
>
>
>
>
>
>
>
>
>
It's ugly, but Form 2210 Schedule AI is used to annualize income and deductions vs estimated and withheld taxes. So if most of your income is last quarter, it will determine most of your estimates should have been last quarter.
If you are an individual, I know of no extension that only goes to 6/15. It should extend the FILING date to 10/15. Assuming you are an individual, use form 2210. On this form you can show a large earnings in the last quarter and the penalty will be based on that fact. Mike
The Out-of-the-country exception is a two-month extension.
If you are out of the country on 4/15, you have an automatic extension to 6/15 to file your tax return. You do not need to file Form 4868, to avail yourself of this extension. See the instructions for Form 4868 for details. Ira Smilovitz
If you had based your installments on last year's tax, you wouldn't owe enything more for a large capital gain anytime during the year. If your 4 (EQUAL AND ON TIME)installments plus withholding did not equal last year's tax (110% of last year's tax if your AGI last year was over $150,000)and you paid your full tax due on April 15 the penalty will be .05258 of the underpayment and the IRS will figure it and send you a bill if it's a significant amount. No form 2210 is needed. See page 2 of form 2210 Short Method. ed
Have something to add? Share your thoughts — no account required.
Ask the community — no account required