Washington’s Online Reporting System for Capital Gains Tax is Now Live
Have you heard of Washington’s Online Reporting System for Capital Gains Tax?
In this blog post, David Martinson, CPA, Tax Manager at VSH, provides some key items to know about the Washington Capital Gains tax. VSH is keeping up to date on any new information as it continues to roll out.
VSH Insight
- The new Washington capital gains tax applies to individuals who are Washington residents on their applicable long-term capital gains in excess of a $250,000 standard deduction at a rate of 7%.
- The law is currently valid and effective as of January 1, 2022, with first payments due April 18, 2023. There are significant penalties for late filing and late payment of tax. If an individual has obtained an extension of time to file their federal return for the year, the same extension applies for Washington capital gains tax reporting, but not to payment of any tax due.
- Due to a standard deduction of $250,000 and exemptions for real estate and family-owned businesses, the tax will most frequently apply to sales of securities by individuals and intangibles sold by pass-through entities that do not otherwise qualify for exemption.
- WA Department of Revenue has a guide to show what preparing the return looks like online: Capital Gains Tax Return Guide
- To register and file your WA capital gains tax return, the following steps are for individuals or tax preparers:
-
- Log in or sign up for a Secure Access Washington (SAW) account to access the DOR online system, My DOR. See instructions.
- Register for a capital gains tax account in My DOR. You will receive a welcome letter after registering.
- Tax preparers: You will create an account for each individual client.
- Gain access to the account by using the letter ID in your welcome letter.
- File the return, make a payment, and/or request an extension in My DOR.
If you have questions about how the capital gains tax affects your situation, contact a VSH tax advisor for assistance.
