Your Tax Question - 029

Dear John, The last few years my wife and I have ended up owing taxes to MI, but this year since it's over $500 we're being penalized for it being late. Last year we paid over $500 and weren't penalized. is this was a new law this year. I'm rather ignorant about taxes and rely on TurboTax to help me out. Thx, Chuck
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Hi Chuck,

There are 10 civil and 4 criminal penalties imposed by MI but without seeing the forms and reasoning of your software program I am at a loss as to what your specific situation is. With that disclaimer I am willing to venture that the state acts like the federal in situations like this. When you owe Federal Taxes of over $1000 in a year you are required to pay Estimated Tax because simply put - the government will not wait for money. I am guessing that this is why you have been gigged for the $500 mark on your state taxes. Why this year and not last? I am not sure.

My best advice is to search your program's Help for the answer and you may even have to call the State Treasury Department. However, when it boils down to it, you may be further ahead to simply pay the fines than to hire a tax professional to solve this problem.

And oh yeah, consider fixing your W-4 with your HR department at work so that they can start taking more money out of your paycheck.

I hope this helps,
John

PS. I know a really good tax guy ;-) email me.