I am 64 and made withdrawals from IRA accounts in 2019 and 2020. I am being charged by State of MI a penalty fee this year because I owed 2 years in a row. Any way to not pay the penalty for MIchigan? The federal I did not have to pay the penalty.

cs112 — Wed, 31 Mar 2021 15:36:39 GMT

Re: I am 64 and made withdrawals from IRA accounts in 2019 and 2020. I am being charged by State ...

DanaB27 — Wed, 31 Mar 2021 15:51:20 GMT

It depends, if you receive income unevenly during the year (e.g., from a one time IRA withdrawal, seasonal business, capital gain, severance pay or bonus) you may annualize your income to avoid paying the penalty. Search for "annualizing your tax" and use the Jump to link.

The Michigan Department of Treasury follows the Internal Revenue Service (IRS) guidelines for estimated tax requirements. Based on the IRS estimated income tax requirements, to avoid penalty and interest for underpaid estimates, your total tax paid through credits and withholding must be:

90% of your current year's tax liability or
100% of the previous year's tax liability or
110% of your previous year's tax liability if your previous year's adjusted gross income is more than $150,000 ($75,000 for married filing separately)

You might have to adjust your state withholdings or make estimated payments to Michigan to avoid having a penalty next year.

topic I am 64 and made withdrawals from IRA accounts in 2019 and 2020. I am being charged by State of MI a penalty fee this year because I owed 2 years in a row. Any way to not pay the penalty for MIchigan? The federal I did not have to pay the penalty. in Get your taxes done using TurboTax

I am 64 and made withdrawals from IRA accounts in 2019 and 2020. I am being charged by State of MI a penalty fee this year because I owed 2 years in a row. Any way to not pay the penalty for MIchigan? The federal I did not have to pay the penalty.

Re: I am 64 and made withdrawals from IRA accounts in 2019 and 2020. I am being charged by State ...