Calculating Form 8621 (PFIC) by April 15th for US Taxes

My understanding is that I need to pay all my US taxes due by 04/15 to avoid a penalty. Last year, I received one PFIC on 4/13 and the other in July. How do people estimate what the amount of earnings will be?

You should be able to file for an extension. I think you may need to make an estimated payment, but I don’t think you’ll run into trouble so long as you make a good faith effort to pay what you know you’ll owe and true it up later.

Not sure on the estimated payment though

Yeah I am talking about calculating the estimated payment.

Estimated payments can be made quarterly. You don’t need to pay full year estimate on April 15, just a quarter of projected annual tax owed (using previous year as reasonable basis). Once you have your PFIC later in the year you can adjust your next quarterly payment up or down as needed. It’s worth getting an accountant involved once you’re dealing with PFICs because the filing is more complicated than standard income earners.

OP is talking about FY2023 I believe.

In this case, the only safe thing to do is estimate the total gain, assume worst tax rate, grind it into your tax return, then pay that much with your 4/15 extension. Otherwise if you are wrong then you will owe some amount of underpayment penalty. This used to not be a big deal but penalty rates are something like 8%? this year so you might care.

The IRS does not care about good faith efforts in terms of the total payment they receive. They will let you extend with no issue, and be wrong in your final calculation with no issue assuming a good faith effort, but if you’re about so far off then they will want their penalty rate and there’s no forgiveness on that.

There is a form for the underpayment penalty calculation, you can grind it out yourself and see if you care enough to do something about it.

You probably should take a gander at the “safe-harbor” rules - e.g. if you have already paid in N % of last year’s tax or the like, then no underpayment penalty may apply. It might apply to you, which would make the point moot.

For some people some times there is a need to make quarterly estimated payments but if you are a regular salaried employee it rarely tends to apply - you need a fairly significant imbalance of lump-sum income to get to that point.

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Exactly what I was asking. I will just double the gains from last year. If it is more than that, I will be happy with a significant return on my fund.

Sure, if you’re a wage earner, but quarterly estimated payments are required in a lot of common situations where your taxes are not otherwise withheld - self employed, independent contractor, freelancers, and a lot of investors.