Your income tax liability accrues on income as it is earned.

Failure to file and make the required estimated payments will result in an assessment or bill for the penalty and interest being issued by the Michigan Department of Treasury.

Based on the 2009 IRS estimated income tax requirements, to avoid penalties for failure to make estimated tax payments in 2008, your total tax paid through credits and withholding must be:

90 percent of your total 2009 tax or 100 percent of your total 2008 tax. 2009 estimates for taxpayers with 2008 adjusted gross income of $150,000 or more for joint or single filers ($75,000 or more for married filing separate) must equal 90 percent of the current year's liability or 110 percent of the previous year's liability.

Farmers, commercial fishers and seafarers may have to pay estimates but they do have other filing options. For more information refer to the MI-1040 Instruction Booklet.

Penalty is 5 percent per month up to 25 percent of the tax due or 10% or 25% for filing late or failing to pay enough with your estimated payments.