Do I need Form 1040-ES or 1099-S after selling my house between 1-2 years for profit?

I just closed on my house sale last month after living in it for 18 months and made about $42,000 in profit. I know I have to pay capital gains tax (15% rate I think) since I owned it less than 2 years. My closing attorney told me to just file a 1040-ES form and pay the estimated tax online to the IRS this quarter, and that should take care of everything. No other forms needed. Does this sound right? Or should I be using a 1099-S form instead? For payment, do I just go to IRS Direct Pay and select "Estimated Tax" when making the payment? If 1099-S is the correct form, would it fall under a different payment category? Also, the title company hasn't sent me any tax documents like a 1099-S. Should I have received something from them after closing? One more thing - I usually file my taxes with TurboTax. Will there be a way to indicate I already paid taxes on the house sale so I don't end up paying twice? Thanks for any help you can give me on this confusing situation!

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19 comments

Isla Fischer

•8M

Your attorney is essentially correct. The 1040-ES is what you use to make estimated tax payments, which is what you should do if you have a significant capital gain that wasn't subject to withholding. The 1099-S is actually an information return that the closing agent or title company should provide to you (and the IRS) reporting the sale proceeds of your home. You don't "use" this form yourself - you receive it and then use the information when filing your taxes. If you haven't received one, they may not have been required to issue it depending on certain exemptions related to primary residences. For payment, yes - use IRS Direct Pay and select "Estimated Tax" as the payment reason, and the applicable quarter. This payment will be reported when you file your annual tax return. When you file your 2023 taxes with TurboTax, there will be a section for reporting both the home sale and any estimated tax payments you made. The software will walk you through entering the 1099-S information (if you receive one) and your estimated payments, which will prevent any double taxation.

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Isla Fischer

•8M

For estimating your tax payment, the simplified approach would be to multiply your gain (approximately $42,000) by 15%. However, capital gains tax can be more complex depending on your overall income, which might push you into a different bracket (0%, 15%, or 20%). You may want to use the IRS's tax withholding estimator or consult with a tax professional to get a precise figure. You won't get in trouble if the title company didn't send a 1099-S when they should have - that's their responsibility, not yours. You're still required to report the sale regardless of whether you receive the form. If you're concerned, you could contact the title company to ask if they'll be issuing one, but you can proceed with your estimated tax payment either way.

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Ruby Blake

•8M

I went through something similar last year with my condo sale. I found this amazing AI tool called taxr.ai that helped me figure out exactly which forms I needed and how much to pay. You upload your closing documents and it analyzes everything, tells you what tax forms apply to your situation, and calculates your potential capital gains. I was confused about the whole 1040-ES vs 1099-S thing too, and the site explained that the 1099-S is just an information form you receive, not something you file. It also helped me figure out how much I needed to pay for estimated taxes. The best part was that it caught some deductions related to my selling costs that I would have missed. Check out https://taxr.ai - it made this whole process way less stressful for me.

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Ruby Blake

•8M

It doesn't connect directly to the IRS - it's an analysis tool that reviews your documents and provides guidance based on tax rules. It's more like having a tax expert look over your situation and give you advice rather than filing for you. I felt the same way about trusting new tools, but they explain everything clearly and cite the relevant tax codes. The cost varies depending on what level of service you need, but it was definitely less than what I would have paid for an hour with a CPA. For me it was worth it because it gave me confidence I was handling everything correctly and potentially saved me from making an expensive mistake. They offer different options based on how complex your situation is.

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Ella Harper

•8M

Just wanted to report back that I tried taxr.ai after seeing it mentioned here. It was super helpful! I uploaded my closing documents and it broke down exactly what I needed to do. It confirmed I needed to make an estimated tax payment using form 1040-ES and calculated the exact amount I should pay based on my specific situation. The analysis showed I could deduct some of my closing costs and improvements I made to the house, which lowered my capital gain by about $8,000. That saved me around $1,200 in taxes I would have overpaid! The site also generated a PDF worksheet showing how they calculated everything that I can keep for my records in case of an audit. Definitely made me feel more confident about handling this correctly. Will use it again next time I have a complicated tax situation.

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PrinceJoe

•8M

If you're planning to call the IRS to confirm anything about your situation, good luck! I spent THREE DAYS trying to get through to someone about a similar capital gains question. Kept getting disconnected or waiting for hours. Finally found this service called Claimyr that got me through to an IRS agent in about 20 minutes. They basically call the IRS for you, wait on hold, and then call you when they have an agent on the line. I was super skeptical at first but it actually worked! You can see how it works at https://youtu.be/_kiP6q8DX5c I used it at https://claimyr.com and finally got my questions answered by an actual IRS representative. The agent confirmed I needed to use Form 1040-ES for my estimated payment and explained exactly how to properly report it on my annual return. Saved me a ton of stress and guesswork.

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PrinceJoe

•8M

They use an automated system that repeatedly calls the IRS using multiple lines until one gets through. It's basically doing what you'd do manually but with technology. When a line connects, they call you and connect you directly with the IRS agent. You're not sharing any tax details with them - they're just getting you connected. I was definitely skeptical too! But after days of frustration, I was desperate. They don't actually talk to the IRS for you or access any of your information. They just make the connection and then you speak directly with the IRS yourself. Honestly, given how impossible it is to reach the IRS these days, I'd use it again in a heartbeat rather than waste days trying to get through myself.

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Owen Devar

•8M

OK I need to follow up about that Claimyr service. I was totally convinced it was a scam, but after struggling for almost a week trying to get through to the IRS about my house sale, I broke down and tried it. I'm genuinely shocked - it actually worked exactly as described. I got a call back in about 35 minutes, and suddenly I was talking to a real IRS agent! The agent confirmed everything about my 1040-ES question and even helped me understand how to properly document my estimated tax payment on my annual return. I hate admitting when I'm wrong, but in this case I definitely was. If you're stuck trying to get IRS clarification on something like this house sale situation, it's worth considering. Saved me days of frustration and now I have official guidance directly from the IRS.

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Daniel Rivera

•8M

Just as an FYI, I think your attorney meant to file a 1040-ES PAYMENT VOUCHER, not actually "file a form 1040-ES" - this is just a slip you send with your check if you're mailing a payment instead of paying online. If you're using Direct Pay online, you don't even need the voucher. Also, when you file your taxes next year, you'll need to report the home sale on Form 8949 and Schedule D, not just mention that you made an estimated payment. The payment and the reporting of the sale are two separate things.

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Daniel Rivera

•8M

Yes, that's exactly right. Just make the payment online now using the Direct Pay Estimated Tax option for the current quarter. Then when tax time comes around next year, TurboTax will definitely walk you through reporting both the home sale (on Form 8949 and Schedule D) and the estimated tax payment you made. TurboTax is pretty good about asking if you sold any property during the year and will guide you through entering all the details including your basis (what you paid plus improvements), selling price, and dates. It will also ask about estimated tax payments you made during the year. Just make sure you select the option to report a home sale when going through the program.

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Isla Fischer

•8M

Yes, you'd be in a similar situation. Since you'll make a significant profit on a house you've owned for less than 2 years, you should make an estimated tax payment using the 1040-ES payment system (either online or with a voucher if mailing a check). The amount would depend on your tax bracket, but at minimum, you'd want to pay estimated tax on the capital gain to avoid an underpayment penalty. Since your sale is in October, you'd make the payment for the fourth quarter of the tax year. Just like the original poster, you'll need to report the sale on your tax return using Form 8949 and Schedule D.

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Elijah Knight

•4M

I'm in a similar situation and wanted to share what I learned from my research. One thing to keep in mind is that the 15% capital gains rate isn't guaranteed - it depends on your total income for the year. If your adjusted gross income (including the capital gain) puts you in a higher tax bracket, you could be looking at 20% instead of 15%. Also, don't forget that you can reduce your capital gain by adding your selling costs (realtor commissions, title fees, etc.) and any qualifying home improvements you made during the 18 months you owned it. These can significantly reduce the amount you owe. For the 1099-S question - title companies are required to issue one if the proceeds are $250,000 or more, but they have some discretion for smaller amounts. Even if you don't receive one, you still need to report the sale. I'd suggest keeping all your closing documents organized since you'll need them for your tax filing regardless. One last tip: consider making the estimated payment slightly higher than your calculation to avoid any potential underpayment penalties. You'll get any overpayment back as a refund when you file your return.

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