To cover State taxes I usually mail in my estimated State taxes early in the Calendar Year which so far has been more than enough to cover my annual tax bill. I am a retired Federal employee, and Alabama permits taxpayers to deduct Federal income taxes. Alabama does not tax Federal and Social Security annuities so my taxable income is substantially reduced on my State return. Only my IRA and interest/dividend income are taxed For 2023 my Federal tax bill was high, due to the effects of higher interest rates. I had to pay the US Treasury more than anticipated. This increased my Federal taxes and reduced my State taxes. I credited most of my State overpayment to 2024 taxes, and will receive a refund for less than $100 from the State.
