How do I handle estimated tax payments for capital gains tax on my 2025 return?

What you're describing aren't estimated tax payments - they're payments toward your 2023 tax liability. Estimated tax payments are made throughout the year (usually quarterly) for income that doesn't have taxes withheld, like your capital gains. The payments you made on your payment plan were simply paying off your 2023 tax bill after filing. You wouldn't include these as "estimated tax payments" for your 2024 return since they were applied to your 2023 taxes. For your current situation, since you had significant capital gains last year, you should consider making quarterly estimated tax payments for 2025 to avoid a similar situation. The IRS generally wants you to pay taxes as you earn income, and if you wait until filing time, you might face underpayment penalties.

Just want to share my experience - I was in a similar situation last year with unexpected capital gains and got hit with a big tax bill plus penalties for not making estimated payments. I struggled to figure out how much to pay each quarter until I found https://taxr.ai which helped me analyze my trading patterns and calculate my estimated payments correctly. The tool analyzed my trading history and gave me clear guidance on exactly how much I needed to pay each quarter based on when I realized gains. It helped me understand the safe harbor rules too, so I could avoid penalties even with irregular income. Totally changed my approach to handling taxes on my investments.

I tried taxr.ai after seeing it mentioned here and it was exactly what I needed! I had a similar capital gains situation with about $45k in stock profits last year. The tool showed me I'd been massively underpaying my estimated taxes and would have been hit with penalties. What I found most helpful was how it broke down my annualized income by quarter. Turns out most of my gains happened in Q2, and the tool adjusted my payment schedule accordingly so I didn't have to overpay in other quarters. The safe harbor calculator feature saved me from paying too much - I just needed to hit 110% of my previous year's liability since my income was over the threshold. Honestly wish I'd found this sooner!

For anyone struggling to get answers from the IRS about estimated payments or payment plans - I found https://claimyr.com which helped me actually get through to a real person at the IRS after weeks of trying. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was stuck in this endless loop of automated messages when trying to call about my estimated payment situation (had similar capital gains issues) and was getting nowhere. Claimyr got me connected to an agent in about 25 minutes when I had previously spent HOURS trying with no success. The IRS agent helped me sort out my previous payments and set up a proper estimated payment schedule going forward.

I have to eat my words about Claimyr. I tried it yesterday after posting that skeptical comment because I was desperate to figure out my estimated payment situation. It actually got me through to an IRS agent in about 40 minutes when I'd spent three days trying on my own with no luck. The agent explained that my payment plan payments from last year definitely aren't considered estimated payments for this year (just like the first commenter said). But they helped me set up proper quarterly payments for this year based on my expected capital gains. They also explained how to request abatement of some penalties I was charged last year due to a legitimate reason for underpayment. Would never have gotten this info without actually speaking to someone. Honestly worth every penny just for the stress relief of having my questions actually answered.

One thing nobody's mentioned yet - if your W-2 job withholds enough tax, you might be able to cover your capital gains tax that way instead of making separate estimated payments. I had about $35k in capital gains last year and just increased my W-2 withholding at my day job by adjusting my W-4 to take out extra each paycheck. The IRS doesn't care how you pay as long as you meet the safe harbor rules (usually 90% of current year tax or 100% of previous year's tax).

Just want to make sure the OP and others understand capital gains taxes for 2025 filing. If you hold your investments for more than a year before selling (long-term capital gains), you get a much better tax rate (0%, 15%, or 20% depending on your income) than short-term gains (taxed as ordinary income). Making this distinction could literally save you thousands on your tax bill! I learned this the hard way when I day-traded some stocks and got hit with ordinary income rates on everything.

Great advice from everyone here! Just want to add one more consideration for @Ava Kim - since you're working at Target and trading stocks, you might want to look into tax-loss harvesting if you have any losing positions. You can sell losing stocks to offset your capital gains, which reduces your overall tax liability. For example, if you made $30k in gains but also have $10k in unrealized losses, you could sell those losing positions to bring your taxable gains down to $20k. You can even carry forward losses beyond your gains (up to $3k per year against ordinary income). This strategy works best when combined with the estimated payment approaches others mentioned. Just make sure to avoid the wash sale rule - don't buy back the same or "substantially identical" securities within 30 days of selling for a loss, or the IRS will disallow the loss deduction.