On Thu, 22 Apr 2021 01:23:55 -0400, wrote:

On Wed, 21 Apr 2021 20:45:24 -0500, Jim Joyce
wrote:

On Tue, 20 Apr 2021 17:42:34 -0400, wrote:

On Tue, 20 Apr 2021 15:48:33 -0500, Jim Joyce
wrote:

On Mon, 19 Apr 2021 09:27:34 -0400, wrote:

On Mon, 19 Apr 2021 01:28:25 -0500, Jim Joyce
wrote:

On Mon, 19 Apr 2021 00:50:09 -0400, wrote:

On Sun, 18 Apr 2021 22:11:44 -0500, Jim Joyce
wrote:

On Sun, 18 Apr 2021 21:50:33 -0400, wrote:

Again with the chicken reference. If you're skirting the law, as you seem
to be suggesting, I'd advise you to take a better look at what you're
doing.

Frank gave you the perfect example. He underestimated his withholding
and ended up writing too big a check A couple years later they
actually looked at his return, assessed a penalty and charged interest
on that penalty for a couple years before he even knew he was in
trouble.

I don't know what that contrived scenario has to do with what we've been
talking about. Your estimated withholding is unrelated to any capital gains
or losses you encounter as a result of selling financial instruments.

You don't have Federal tax withheld (from what? from where?) on the off
chance that you might sell some stock shares and make a profit. Those are
two entirely different things, not captured anywhere near each other on
your return and not related to one another in any way.

Is that what you've been worrying about all this time? Well, don't.

I think what might have confused you is that the net of capital gains minus
capital losses is added to (or subtracted from, if negative) your ordinary
income amount and the sum is reported as total income. Withholding isn't
affected by capital gains, though. It's possible to owe a ton of Federal
tax if you made a ton of capital gains, but that doesn't enter into the
calculation on whether you didn't withhold enough throughout the year. The
IRS knows that taxpayers have no idea what the market rate will be when a
taxpayer decides to sell an asset. They aren't going to penalize you for
selling in a hot market. Think about it.

You are the first person I have ever heard who said a big capital gain
did not abrogate the rule about owing too much money at tax time.

Thank you. I'm glad I could help.

Now we can stop the nonsense about playing chicken, etc.

The chicken part is still true for the ones you say you are helping.

No.

If someone is trying to micro manage their withholding to minimize
their return, they can guess wrong.

It's not rocket science, but people have got to know their limitations, as
Clint Eastwood more or less said once. If the subject of taxation, income,
and withholding all sound like black magic, go ahead and give Uncle Sam a
nice big interest free loan. He won't complain one bit, but when he pays it
back in the form of a refund, it'll be without interest. I don't choose to
do things that way.

If you don't have a pretty good
sized slush fund, paying might be a burden. The average American would
be hard pressed to come up with a few grand on short notice.
As for me, I just look at it as a T bill that pays 0.04% less than the
going rate. I can afford the two bucks I am missing out on.

As I pointed out earlier, it's probably more like $500, but you've been
clear that $500 isn't going to break the bank either way.

I made it clear, I have investments and I have cash parked. Parking at
the IRS is as safe as parking it in a T bill and I am only giving up
0.04% with a whole lot less hassle. The bank isn't much better either.
I barely notice it missing nor do I see much when it comes back.

It's OK. Not everyone is good at managing their money.