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Strategies & Market Trends : Income Taxes and Record Keeping ( tax ) -- Ignore unavailable to you. Want to Upgrade?

To: JungleCat who wrote (1678)	12/30/1998 6:10:00 PM
From: dpl	Respond to of 5810

Try fairmark.com

To: JungleCat who wrote (1678)	12/30/1998 6:11:00 PM
From: Bill Shepherd	Respond to of 5810

RE: Does anybody out there know if there is a simple rule of thumb for when one would be required to pay quarterly taxes due to a short term capital gain? For example, let's say I make a trade on January 1, 1999, that results in a profit that increases my net income by 20%. Can I wait until April 15, 2000 to pay the tax on it or is it not that simple? TIA. I think the simple rule is, if your withholding covers at least 90 percent of the taxes due at the end of the year, you're OK, and needn't worry about quarterly filing. If, on the other hand, your withholdings do not cover 90 percent of you taxes this year AND you have the same problem next year, the IRS will likely impose a penalty. So, if you had a one-time gain, and needed to write a check to the IRS this year, but don't expect the same to occur next year, you will likely be OK as far as the IRS is concerned. However, if you have a one-time gain in 1999 that pushes you over the 90 percent mark, and expect the same in 2000, either start making quarterly estimates, have your broker withhold 20 percent, or boost up your payroll withholdings (or a combination of these)...just be sure that your "withheld" amount covers 90 percent of the taxes due. My opinion only...consult a tax advisor if you have serious questions! Bill S