Sold Position - How to send the IRS a check?

[DyNess]

Greetings,

It has been awhile since I last posted.

TLDR: I sold a large amount and am asking how to make the "quarterly" tax estimate payment to the IRS?

The Story:
-Single, no kids.
-I retired in 2023, military + VA. I do some part time work on the side to keep active.
-I moved to Florida and have been enjoying it. So I bought a house in February 2024, closed in March.
-After running the numbers, the mortgage was my biggest outflow.
-I cannot itemize enough on my taxes to take advantage, and instead of lining other peoples pockets, I decided to sell some mutual funds at Vanguard and to pay off the house entirely, and perform some upgrades.
-These funds/money was/were in a taxable account.
-I had called Vanguard when I moved some money out of my ROTH, and they were able to send a portion of it to the IRS. When I called about my taxable account, they cannot send a portion of this to the IRS.
-Per IRS, they want a quarterly payment on taxes if estimated to be over a certain value... I think I qualify, and know how much I need to send them.

Basically, how do I get this money to them so it doesnt flag on me for owing massive in taxes next year? I would like to pay it now, as I sold just over $300k... I know roughly how much I owe, just need to get it to them.

Thank you all for all of the support over the years.

~Dy'Ness


Edit for clarification: The monthly income I receive, plus other "guaranteed" stuff, cover more than my entirety of expenses. I could have swung the mortgage into it, but it would have been tight. The sale removes that from the equation, basically leaving me more monthly spending available, and I will be using that for the home and will start rebuilding the investment account. Just didnt want to see all those thousands going to a mortgage company, instead of working for me.

 

[MarieIG]

https://www.irs.gov/pub/irs-pdf/f1040es.pdf

Here are instructions with the payment slips at the bottom.

 

[Sunset]

OP - If you sold the $300K of stock in 2024, you can do the following:

You can pay in 4 installments 110% of your total 2023 tax bill. This is the safe harbor rule, so there will not be any penalties.

Put the rest of the money you estimate you will owe on 2024 taxes into treasury bills or your favorite money market earning 5.25% interest.

When you do your 2024 taxes, pay the remaining owed from the interest earning money you set aside. Use the interest to buy yourself a dinner.

Why let the gov't have all you payment when it's not fully due yet, sort of like the mortgage company thing.

You can set up electronic payments. Search for it here on the site as people have asked how to do this before.

 

[Morgan22]

You can use the IRS direct pay to make an estimated payment. https://www.irs.gov/payments/direct-pay

You can pay all your estimated taxes in Q1 if you want, or spread it out over 4 quarters.

 

[PaunchyPirate]

You can also make estimated tax payments to the IRS from inside your account with the IRS. You can create this account at https://www.irs.gov/your-account

I think everyone should go thru the process to create an IRS account. Once you have that, learn how to request tax return and account-level transcripts. These transcripts are very valuable if you ever want to try and understand what is going on with your tax return(s).

They recently added the ability to make estimated payments via ACH from within this account.

 

[DyNess]

Awesome! Thank you all very much. Best of wishes!

 

[SecondCor521]

If you have a 2% cash back credit card, you can come out ahead by a few nickels if you use payusatax.com, which charges 1.82% for credit cards.

They are listed on the IRS website as a payment processor (along with two others, which I understand work equivalently):

https://www.irs.gov/payments/pay-your-taxes-by-debit-or-credit-card

It's only federal taxes, not state taxes.

The payment is counted as of when the charge goes through successfully. It's treated as a purchase, not a cash advance. And you might be able to pay the CC bill ~45 days later, after earning some interest in the meanwhile.

I just did this for the first time yesterday for my 2023 balance owing and it appears to have worked as expected.

Obviously may not be worth the hassle to some folks.

 

[jebmke]

You can use the IRS direct pay to make an estimated payment. https://www.irs.gov/payments/direct-pay

You can pay all your estimated taxes in Q1 if you want, or spread it out over 4 quarters.

this; I use EFTPS because I have already created an account there but if not, I would use Direct Pay.

 

[Sojourner]

If you have a 2% cash back credit card, you can come out ahead by a few nickels if you use payusatax.com, which charges 1.82% for credit cards.

Wow... this could be a great way to earn some easy credit card sign-up bonus money! For example, one could sign up for the Chase Ink Business Unlimited card and qualify for the $750 sign-up bonus within the first month just by paying $6,000 in quarterly estimated tax with the card. Since it gives 1.5% cash back on all purchases, the net cost would only be $19. I might look into doing this for my Q2 estimated tax payment. Probably too late to apply for and receive the card before April 15th, at this point. Great tip, though... thanks!

 

[Sunset]

If you have a 2% cash back credit card, you can come out ahead by a few nickels if you use payusatax.com, which charges 1.82% for credit cards.

They are listed on the IRS website as a payment processor (along with two others, which I understand work equivalently):

https://www.irs.gov/payments/pay-your-taxes-by-debit-or-credit-card

It's only federal taxes, not state taxes.

The payment is counted as of when the charge goes through successfully. It's treated as a purchase, not a cash advance. And you might be able to pay the CC bill ~45 days later, after earning some interest in the meanwhile.

I just did this for the first time yesterday for my 2023 balance owing and it appears to have worked as expected.

Obviously may not be worth the hassle to some folks.

Interesting idea....

I have a CC that pays 2.6% , so I used it to pay property taxes and netted about $25 plus interest for a month.

Didn't know it could work for Fed taxes too