Tax penalty (Fed and NYS)

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50ismygoal
Posts: 169
Joined: Tue Jun 24, 2014 6:41 am

Tax penalty (Fed and NYS)

Post by 50ismygoal » Thu Jan 04, 2018 6:09 pm

I retired in May of last year, and this is the first year that I will be a low-income retiree. My tax bills will be very low, although this year I may take more capital gains than I would normally expect I can either file "estimated" tax payments, for the first time, or just go through the year and possibly face a penalty when I file in April of 2019. Can anyone here tell me what the penalties for federal and NYS are? I Googled the topic and lots of links came up but I couldn't find an answer.

kaneohe
Posts: 4822
Joined: Mon Sep 22, 2008 12:38 pm

Re: Tax penalty (Fed and NYS)

Post by kaneohe » Thu Jan 04, 2018 6:33 pm

Calculate the tax that will be due. For estimated taxes, the simple way is to have 4 equal payment "quarterly". The penalty is figured on each payment so the time period delinquent will vary from 3 mos. to 1 yr for an average period of about 7.5 mos. At an annual rate of 4%, take your
total amount due and figure about 2.5% on that for federal penalty.

talzara
Posts: 545
Joined: Thu Feb 12, 2009 7:40 pm

Re: Tax penalty (Fed and NYS)

Post by talzara » Fri Jan 05, 2018 6:02 pm

New York's underpayment penalty is higher, at 7.5% per year.

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