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I recently got something from the Michigan Department of Treasury in the mail that looks like 4 sort of coupons where I tear a section out and write down payment amount (not sure how much to write down as it doesnt say) and has different due dates: April 15 2024, June 17 2024, September 16 2024, January 15 2025.

I've never had such a thing been mailed to me, I always do my own taxes and I file jointly with my wife. As I am doing them this year (using turbotax) so far the state of michigan owes me like 300$ for my 2023 taxes.

However, when I read the instructions from this document that was mailed to me, it says the following:

Who Must File Estimated Tax Payments

You must make estimated income tax payments if you expect to owe more then $500 when you file your 2024 MI-1040 Return. If you owe more then $500, you may not have to make estimated payments if you expect your 2024 withholding to be at least: -90 percent of your total 2024 tax (qualified farmers, fishermen and seafarers use 66 and 2/3 percent) -100 percent of your 2023 tax, or -110 percent of your total 2023 tax if your 2023 adjusted gross income is more then 150,000 (75,000 for married filing sperately).

Estimated tax payments are not needed if two-thirds of your gross income is from farming, fishing, or seafaring and you meet the qualifications. Estimate filing requirements apply whether or not you are a MI resident.

DO NOT SUBMIT THIS FORM FOR ANY QUARTER that you do not have estimated tax due.

Based on what I am reading from above, it appears I do not have to do this, I mean the taxes I am doing right now are for 2023, so I am confused why I got this for 2024? Maybe they are saying, when its 2025 and I am doing my taxes for 2024 If I plan to owe more then $500.00 to the state of michigan I have to do these estimated payments? Is that what it means?

If so I do not plan to owe that much to the state of Michigan because I plan to continue contributing to my 3 kids' MESP 529 plan. (See my comments in this question below). The one year (2022) I owed the state of Michigan around $800.00 was because I did not fully contribute to these accounts causing me to owe the state of Michigan. However, in 2023 during that year I fully contributed around 18k to my kids' college 529 accounts which caused my state of MI taxes to not owe but get money back (currently $300.00). I plan to do the same thing in 2024 and my salary has not increased.

I have no clue what this is, and why I suddenly got it. I've been doing my taxes for prolly ten years now and I've never had such a thing. Do I need to do anything given that I do not owe the state of michigan?

For background:

I live and work in the state of Michigan all my life. No other state nor any foreign accounts etc. Everything is local, I and my wife both work I make in the around 170k a year and my wife makes around 30k a year.

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    Did you owe money in 2022?
    – mkennedy
    Jan 19 at 14:44
  • @mkennedy - In 2022 I did pay federal over 8k and I paid to the state of michigan $877.00. However, doing my 2023 taxes (Currently) so far I am paying federal around 4k and state is returning me around $300.00. Granted I'm not fully done but the majority is done and most likely I would be paid by the state a little amount.
    – JonH
    Jan 19 at 14:48
  • cont...part of the reason why i owed in prior years is I was not fully contributing to my kids college accounts (i know big mistake) last year 2023 I fully contributed (3 kids) around 18k which in turn helped with my MI state taxes, causing it not to owe money to the state. I wish I had done that in prior years but I had some financial duties on other things that were going on. Therefore, based on the instructions that I posted, I do not feel I will owe more then 500$ for 2024 because I plan to contribute to these college funds again and my salary hasn't changed.
    – JonH
    Jan 19 at 14:55

2 Answers 2

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The government (federal and/or state) wants to see tax money come in throughout the year, not just by the filing date. If they conclude that, for any quarter, you total tax payments up to that point fall short of what you should reasonably have expected them to be, you may be charged interest and a nuisance fee on the shortfall.

So if you owed a large amount of tax with your forms last year, you will automatically receive a suggestion that you consider making quarterly Estimated Tax payments to avoid those additional costs.

You don't have to take that advice. You may be able to accomplish the same thing but increasing payroll deductions; that was my approach for many years. Or you can make a big payment into the system at the start of the year to make sure you're in the "safe harbor" range for the rest of the year. Or you can simply accept paying the interest and penalties, if here turn out to be any, and hope there aren't.

Do read the instructions that came with the quarterly forms., which provide a suggested calculation for what payment you should be making each quarter. And see past answers here about Estimated Tax.

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  • Are you saying I could forego this and continue my goal of contributing money to for instance my kids college accounts through the state of michigan which helps my local state taxes and stay in the safe zone of not owing the state money? Which means I do not have to fill out these coupon forms? Thank you so far for your advice.
    – JonH
    Jan 19 at 15:23
  • You mention this: "You may be able to accomplish the same thing but increasing payroll deductions; that was my approach for many years." how do I do such a thing? I am already claiming my family (wife and 3 kids). Are you saying somehow pay more to the state through payroll deductions. Can you please elaborate on that or give me advice on what I should change or what I can do?
    – JonH
    Jan 19 at 15:28
  • I can't vouch for your state or your employer, but mine was perfectly happy to let me turn in a W4 that increased my payments, even if I had to do so by withholding "as if" I had more dependents. It's been a decade since I had to adjust that so I'm not remembering details; I'll try to take a look at the form. Your employer's payroll department should be able to help you with this; it isn't an uncommon situation for those of us with variable or non-salary income.
    – keshlam
    Jan 19 at 16:40
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Back in the day when everybody submitted paper copies of their tax forms, including attaching W-2, and 1099's, the US post office delivered a package of tax forms in late December or early January to each household. In those days there were 3 versions of the 1040 tax forms.

They didn't mail the forms an the instructions for all 3 forms to everybody. If the previous year you submitted a 1040EZ you got the package with the 1040EZ and the 1040A. If you itemized the previous year you got the package with the 1040A and the 1040.

Because the state of Michigan thinks you are likely to have to submit estimated taxes, and that the first installment is due in April, they sent you the forms. They are basing it on the forms you submitted in the Spring of 2023.

They have no idea if you will make the safe harbors for your taxes. They have decided that they want to get a jump on the process by providing you the forms.

You can use the ability to have extra withholding on your state income to make those safe harbor levels. This is done via the state version of the W-4.

  1. Enter the number of personal and dependent exemptions (see instructions)
  2. Additional amount you want deducted from each pay (if employer agrees)

In my state I have had extra money withheld, but it appears that Michigan also lets you adjust the number of exemptions.

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  • Ok so basically this is optional. And I have the option to withhold more money to the state of michigan to avoid having to pay the state of michigan at the end of the year. Thank you.
    – JonH
    Jan 20 at 13:26

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