I am now retired. My only income is the government pension. Do I still have to make quarterly payments? How much to avoid penalties, fines and interest?
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I am now retired. My only income is the government pension. Do I still have to make quarterly payments? How much to avoid penalties, fines and interest?

 
3 Replies
Level 4

I am now retired. My only income is the government pension. Do I still have to make quarterly payments? How much to avoid penalties, fines and interest?

In order to avoid an underpayment penalty on your 2019 Tax Return, you need to meet one of the following requirements:

  • Pay in through withholding and/or estimated tax payments at least 100% of the tax shown on your 2018 Tax Return [110% if your AGI was over $150,000 or $75,000 for MFS].
  • Pay in through withholding and/or estimated tax payments at least 90% of your actual 2019 tax liability (Hard to do since you won't actually know this figure until you are preparing your Tax Return next year).
  • Have a balance due less than $1,000 on your 2019 Tax Return

Please comment below if you need further clarification.


Level 4

I am now retired. My only income is the government pension. Do I still have to make quarterly payments? How much to avoid penalties, fines and interest?

@drrmdale If this didn't answer your question, please clarify below.
Level 15

I am now retired. My only income is the government pension. Do I still have to make quarterly payments? How much to avoid penalties, fines and interest?

ask pension to withhold income tax from your monthly payment.
Ask SS to withhold tax from your SS Benefits.
You won't have to pay estimated taxes.

It's a matter of personal preference and convenience.
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