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Same area slightly different question. In 2000 I retired in Septempber and received a years pay in severence and stay bonus compensation. Just used Turbotax to do my returns and discovered I am being called upon pay estimated taxes for 2001.

This year I expected to recieve about 40% of my normal pay plus Soc Security along with my wife's salary from teaching. Overall income (not AGI) for 2001 will be approximately 1/2 of 2000 AGI.

What are the possible consequences of not paying the estimated tax? I have no desire to get sideways with the IRS but assume the ETax was applied because of last year's income which was an anomoly.

Need some help and expertise.

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