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My father recently passed leaving a annuity to my brothers and me. I made a mistake of taking a full withdrawal without consulting a professional a month ago. It was had federal taxes withheld, but not state. Is it cheaper to send in state tax now or wait until I file my return? Is there any time period where I could take this money and invest it and not have to claim it as income?

I am in NY I prob shuld have rolled it into something else

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  • Which state are you in?
    – Ben Miller
    Commented Mar 11, 2017 at 13:42
  • Why do you think it was a mistake? Depending on the interest rate you might be better off investing it in something else and get a better return (if you just spend it all then it probably was a mistake).
    – D Stanley
    Commented Mar 12, 2017 at 3:16
  • Just curious: how can you inherit an annuity? I thought the whole point was that they only paid out during the holder's life? (Or holder & spouse, in the case of a joint annuity.)
    – jamesqf
    Commented Mar 12, 2017 at 3:31
  • my fathers had different annuities and funds with me and brothers being beneficiaries through his job when I withdrew the money they took ot 33,000 in fed tax no state just did my taxes i owe 13,000 in state tax and another 34,000 in fed which was due to it being income and changing my tax bracket
    – tommy
    Commented Mar 12, 2017 at 15:23

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Is it cheaper to send in state tax now or wait until I file my return?

Unless not paying now will trigger some sort of state tax penalty (which will depend on your situation and what state you live in), there's no practical difference between paying now and paying when you file. The only thing you lose by paying now will be the possible return you could earn by investing it, which is probably minimal.

I would be more concerned about the penalties than any opportunity costs.

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