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peter7rabbit
New Member

In March I started receiving an unexpected pension. No taxes were taken out of each month's check. I fear having to pay a penalty for not prepaying. What can I do now?

 
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SweetieJean
Level 15

In March I started receiving an unexpected pension. No taxes were taken out of each month's check. I fear having to pay a penalty for not prepaying. What can I do now?

You can make a 2017 estimated Federal tax payment here:

https://www.irs.gov/payments

You can submit a W-4 to have taxes withheld going forward.

https://www.irs.gov/pub/irs-pdf/fw4p.pdf

Also remember State taxes as applicable.

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3 Replies
SweetieJean
Level 15

In March I started receiving an unexpected pension. No taxes were taken out of each month's check. I fear having to pay a penalty for not prepaying. What can I do now?

You can make a 2017 estimated Federal tax payment here:

https://www.irs.gov/payments

You can submit a W-4 to have taxes withheld going forward.

https://www.irs.gov/pub/irs-pdf/fw4p.pdf

Also remember State taxes as applicable.

rjs
Level 15
Level 15

In March I started receiving an unexpected pension. No taxes were taken out of each month's check. I fear having to pay a penalty for not prepaying. What can I do now?

If you are receiving Social Security or another pension, or if you are still working, you can have additional tax withheld for the rest of the year. Withholding is treated as if you paid it evenly throughout the year, so it can help avoid a penalty for paying late.
dmertz
Level 15

In March I started receiving an unexpected pension. No taxes were taken out of each month's check. I fear having to pay a penalty for not prepaying. What can I do now?

Withholding is treated slightly differently than estimated tax payments.  As rjs said, withholding is treated as applying equally to all 4 tax quarters of the year no matter when the withholding takes place, while estimated tax payments are only credited based on the actual date of the payment.  If you are concerned that not enough was withheld to avoid a federal underpayment penalty for the first 3 tax quarters of the year, you should consider increasing the federal withholding enough to make up the withholding shortfall by the end of 2017.  You would then change to normal withholding levels at the beginning of 2018.
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