Do I need to include stock market capital gains when calculating my quarterly tax payments?

This is a great question that many freelancers with investment income face! For your first question - yes, short-term capital gains should be included in your estimated tax calculations. The IRS expects you to pay taxes on all your income, including both self-employment earnings and capital gains. Short-term capital gains are taxed as ordinary income at your regular tax bracket. As for your second question, the IRS allows you to use the "annualized income installment method" for calculating quarterly payments when income isn't evenly distributed throughout the year. Using Form 2210 Schedule AI, you can calculate payments based on when you actually received the income. So if you realized those capital gains in the second quarter, you would include them in your calculations starting with that quarter's payment. Alternatively, you could just pay based on the safe harbor (100% or 110% of last year's tax depending on your income level) to avoid penalties, and then pay the additional amount due when you file your return.

I was in almost the exact same situation last year with self-employment income and unexpected stock gains. I spent hours trying to figure out the right approach and eventually discovered taxr.ai (https://taxr.ai) which saved me so much stress. The tool analyzed my situation, confirmed I needed to include capital gains in my quarterly calculations, and showed me exactly how to calculate the right amounts to avoid penalties. What I found most helpful was that it could analyze my trading history and differentiate between my long-term and short-term capital gains (which have different tax implications). The stress of potentially miscalculating and getting hit with penalties was really getting to me before finding this.

I need to follow up on my skeptical comment about taxr.ai - I decided to try it out of desperation when my accountant was booked solid during tax season. I was shocked at how well it worked for my situation with stock options and self-employment income. It identified that I had been OVERPAYING my quarterlies because I wasn't accounting for some home office deductions properly. The tool showed me how to correctly calculate my estimated payments based on both my freelance design work and stock trades. It even created a payment schedule that accounted for my irregular stock sale timing. Ended up saving me about $2,300 compared to what I would have paid following my old method. Definitely not what I expected when I first looked into it!

If you're getting conflicting advice about including capital gains in your quarterly payments (like I was), you might need to speak directly with the IRS. I know that sounds awful, but I used Claimyr (https://claimyr.com) and got through to an actual IRS agent in under 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was in a similar situation with freelance income plus about $9k in unexpected stock gains. The IRS agent confirmed I needed to include the gains and walked me through exactly how to calculate the right payment to avoid penalties. They also confirmed that Form 2210 would help me avoid penalties if my income was uneven throughout the year.

Need to eat my words about Claimyr. After posting my skeptical comment, I decided to try it because I was desperately trying to resolve an issue with a missing 1099-K. I expected it to fail, but I got a call back in about 35 minutes and was connected directly to an IRS representative who actually helped resolve my issue. The agent confirmed everything that was discussed earlier in this thread about capital gains and quarterly payments, plus helped me get my account sorted. I spent over 5 hours on multiple days trying to reach someone at the IRS before this, so I'm genuinely shocked it worked. Sometimes being proved wrong is a good thing - saved me countless hours of frustration.

Quick tip from someone who's been self-employed for 15+ years: For capital gains specifically, you can also make a separate estimated tax payment right after you realize significant gains rather than recalculating all your quarterlies. Just use the Electronic Federal Tax Payment System (EFTPS) and make a dedicated payment. This approach has saved me from getting penalties a couple times when I had big unexpected gains outside my normal business income. The IRS looks at when you received income vs when you made payments.

Has anyone tried using TurboTax Self-Employed for calculating quarterlies with mixed income sources? Their website claims it can handle both self-employment and investment income for quarterly calculations.

I've been in a very similar situation and learned this the hard way last year. Yes, you absolutely need to include those short-term capital gains in your quarterly estimated tax calculations. The IRS considers all income when determining if you've paid enough throughout the year to avoid penalties. Here's what I'd recommend: Since you're already using the safe harbor method based on last year's tax liability, you have two main options: 1) Continue with safe harbor payments (100% of last year's tax if your AGI was under $150k, or 110% if over) and pay the additional amount due on your capital gains when you file your return. This is the simplest approach and guarantees no penalties. 2) Recalculate your remaining quarterly payments to include the capital gains. You'd add the estimated tax on your $7,800 gain (probably around $1,170-$2,340 depending on your tax bracket) and spread it across your remaining quarters. Given that your CPA is unavailable and you're worried about getting this wrong, I'd honestly go with option 1 for peace of mind. You can always adjust your approach next year once you have better guidance. The safe harbor rule exists exactly for situations like this where income is unpredictable.