My company got acquired in December 2017 and the payout happened in January 2018. My company didn't deduct the tax and sent the entire amount as a wire. It was a private company. The amount after the close of escrow was around $200k. These are NSOs so they would appear on my w2 for the year 2018. Question: should I make estimated payment for 2018? What's the amount over which if we owe in taxes does IRS penalize us? Would appreciate help from someone who's gone through this in the past. Spoke to couple CPAs but didn't get a clear answer. :-/ Edit:.Included specific information
In general you want to owe less than $1000 by the end of the year to avoid penalty, but there are so many corner cases we can't help you. Get a CPA to help.
This is absolutely false. The rules for penalties are not based on what you owe.
everyone says its good to make the payment, but is it absolutely necessary is not very clear
OP, read your own post carefully. You will see that it doesn’t have enough clarity for anyone to make a reasonable suggestion. * Your company got in what? Acquisition? * What payout? * What type of company structure is it because that determines taxable consequences. FWIW, this is not when to speak theoretically. Specifics matter a lot.
My bad. Added the missing information and now it makes more sense than it did before :-)
Ok, this makes a lot more sense. Pay estimated taxes only to reduce your sticker shock next year. It will not impact your taxable amount though. Also, unless you had an underpayment balance this year, an underpayment next year will not result in a penalty.