Maryland underpayment penalty

[rgar98]

My wife and I are both retired and live in Maryland. I just noticed that we are being penalized $119 for underpayment of our 2024 state taxes. We always file in February and do not understand the penalty. From what I've read I believe it has something to do with estimated taxes. Is this correct? How can I avoid this penalty in the future.

Please explain.

Thank you.

[ThomasM125]

You can be penalized for not paying in sufficient taxes on a quarterly basis. It is not sufficient to pay your taxes before the due date of your tax return in April, you need to pay  them on a quarterly basis so you don't don't owe a lot when you file your tax return.

I suggest you look on line 39 of your Maryland form 502 to determine what your Maryland income tax is. Then, divide that amount by 4 to determine your quarterly tax liability. Your can then have taxes withheld from your sources of income or pay in estimated taxes to insure that you pay in the correct amount of taxes quarterly.

You can submit estimated taxes with Maryland Form PV to pay your estimated taxes.