The safe harbor lets you avoid an underpayment penalty by paying, through withholding and estimates, at least 100 percent of last year's tax (110 percent if prior-year AGI exceeded 150,000 dollars) or 90 percent of the current year's tax.
Payments are due quarterly. Meeting the prior-year safe harbor protects you even if this year’s income is far higher, which is the usual approach for a year with a large crypto gain.
Paying the full tax in April does not avoid the penalty if the quarterly payments were short. Estimated taxes.
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Definitions are general information, not legal advice, and may not reflect the most recent changes in law.
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