How do I calculate quarterly tax payments for unexpected stock gains?

So I've had some really good luck with my stock picks this year and now I'm looking at some pretty significant short-term gains (like $15,000+). I'm freaking out a little because I just realized I'll probably get hit with an underpayment penalty for 2024 since I haven't been making any quarterly payments. The thing is, I honestly had no idea how much I'd make when I started trading - some months were great, others not so much. How are regular people supposed to predict their stock market gains throughout the year to calculate quarterly payments? The market is so unpredictable! Do I just guess? And now that I know I'll likely face penalties for this year, how do I set up the right quarterly payment schedule for next year to avoid this happening again? I've never had to deal with quarterly payments before and the whole process seems really confusing.

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18 comments

Andre Rousseau

•8M

You're facing a common issue for new investors with significant gains. The IRS requires quarterly estimated tax payments when you expect to owe $1,000+ in taxes beyond what's withheld from regular income. For your future quarterly payments, you have a few options: The safest approach is using the "safe harbor" provision - pay either 90% of your current year tax or 100% of your previous year's tax (110% if your AGI was over $150,000). If you meet either of these thresholds through quarterly payments, you avoid penalties even if you end up owing more. For unpredictable income like stock gains, many people default to the previous year's tax method since it's a fixed, knowable number. Then if you have a surprisingly good year, you might owe more at tax time, but without penalties. You can also adjust your withholding at your regular job by filing a new W-4 with your employer requesting additional withholding, which can help offset investment gains.

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Andre Rousseau

•8M

Yes, the 90% refers to your total tax liability for the current year from all sources - your job, investments, etc. That's why it can be hard to use this method when you have unpredictable investment income. For the previous year method, yes, you can absolutely use it even if your income was much lower last year. That's actually when this method is most beneficial! If you pay 100% (or 110% for higher incomes) of last year's total tax through estimated payments or withholding, you're protected from underpayment penalties regardless of how much higher your actual liability is this year.

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Jamal Harris

•8M

After struggling with a similar situation last year, I discovered taxr.ai (https://taxr.ai) and it was a game changer for handling my investment income. I had made about $22k in unexpected stock gains and had no idea how to handle the quarterly payments or what I'd end up owing. What I like is that you can upload your trading statements and it analyzes your specific situation, then helps calculate appropriate quarterly payments based on your realized gains to date. It also does projections based on your trading patterns, which helped me get a better handle on what to expect. The quarterly payment calculator specifically accounted for the timing of my stock sales, which made a huge difference.

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Jamal Harris

•8M

Yes, it works with all the major brokerages including Fidelity and Robinhood. You can import data from multiple platforms and it consolidates everything to give you the complete picture of your trading activity. It's definitely saved me hours of spreadsheet work trying to track gains across different accounts. For wash sales and specific lot identification, it actually handles these really well. The system identifies potential wash sales automatically and flags them for review. For different lots, you can set your preferred method (FIFO, specific identification, etc.) and it will apply that consistently across your calculations. It's much more sophisticated than the basic reports most brokers provide.

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GalaxyGlider

•8M

I wanted to follow up about my experience with taxr.ai after trying it for my stock gains situation. I was honestly shocked at how well it worked! I uploaded my statements from both Fidelity and Robinhood, and it immediately showed me exactly where I stood with my realized gains and what my estimated quarterly tax obligation was. The best part was the "what-if" calculator that showed me how different trading decisions would impact my tax situation. I was planning to sell some additional positions that had gained value, but the tool showed me I'd be better off waiting until January to avoid increasing this year's tax burden. It also set up automatic reminders for my quarterly payment dates which I definitely needed since I kept missing them before.

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Liam Sullivan

•8M

If you're struggling to get answers from the IRS about quarterly payments (like I was), check out Claimyr (https://claimyr.com). I spent DAYS trying to get through to a real person at the IRS to ask specific questions about my situation with stock gains and quarterly payments. After giving up multiple times, I found this service that actually got me through to an IRS agent in about 15 minutes. You can see a demo of how it works here: https://youtu.be/_kiP6q8DX5c I had a bunch of questions about how to handle quarterly payments when my trading was inconsistent month to month, and I needed to know if I could avoid penalties for the quarters where I didn't realize I needed to make payments. The IRS agent walked me through everything and even helped me understand some specific situations with my trades.

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Liam Sullivan

•8M

It's actually not about skipping the queue - they use automated technology to handle the waiting for you. Basically, their system calls the IRS and navigates through all the prompts and wait times, then when they finally reach a human agent, they call you and connect you directly. You don't have to sit on hold for hours or keep redialing. I was definitely skeptical too before trying it, which is why I shared the video link showing how it works. I don't know the exact technology behind it, but it's not magic - just a smart solution to a frustrating problem. I spent 3 hours on multiple calls trying to get through myself with no luck, then Claimyr connected me in about 15 minutes. The time saved was absolutely worth it for me since I needed specific answers about my quarterly payment situation.

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Giovanni Colombo

•8M

I need to eat my words. After posting my skeptical comment yesterday, I decided to give Claimyr a shot out of desperation because I'm facing penalties for missed quarterly payments on my stock gains. I legitimately couldn't believe it when my phone rang and a real IRS agent was on the line. I explained my situation with unexpected stock gains throughout the year and asked about my options for the missed quarterly payments. The agent explained I could request a waiver of the penalty if this was my first time having this issue. They also gave me specific instructions for calculating my future quarterly payments based on my trading patterns, which was exactly what I needed to know. Saved me so much stress and probably money too since I now understand how to handle this properly going forward.

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Fatima Al-Qasimi

•8M

I do sometimes end up overpaying slightly, but I personally prefer that to underpaying and facing penalties. In years when I've overpaid, I just apply the refund to next year's estimated payments. If you're concerned about overpaying, you might want to be more precise in your calculations. I typically use a rough estimate of my marginal rate plus state taxes (about 35% in my case), but you could use tax software to run a more accurate projection after each significant trade to get closer to the exact amount.

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