Tax Q&A;: Estimated Taxes

Q: I have begun to buy and sell stocks and make money on these investments, and I no longer have a source of income from which income taxes are routinely taken. What new reporting do I need to do quarterly, and what form must I file, to pay estimated taxes in advance? How do I get the form?

A: Estimated taxes are paid four times a year--April 15, June 15, Sept. 15 and Jan. 15 of the following year. The estimated payment, along with the proper form, must be postmarked by the above dates.

You can figure your taxes in one of several ways. The federal estimates are based on either 100% of the previous year’s tax or 90% of the current year’s estimated tax. If your income is more than $150,000, the estimates are based on 105% of the previous year’s tax. California estimates are based on 80% of the previous year’s tax.

Federal estimates are paid with IRS Form 1040-ES; the instructions to the form include a work sheet to help you figure out how much you owe. California estimates are paid with California Form 540-ES. These forms can be obtained at the IRS’ Web site at https://www.irs.ustreas.gov and from the California Franchise Tax Board site at https://www.ftb.ca.gov. The IRS forms can also be ordered by calling (800) 829-1040. California forms can be ordered by calling (800) 852-5711.

--ALVIN BROWN, CPA, Woodland Hills

For more information on taxes and to see other questions and answers in this series, go to The Times’ Web site at https://www.latimes.com/taxes. To find a CPA, visit the California Society of CPAs at https://www.calcpa.org.