Question

Chris Baker's adjusted gross income on her 2018 tax return was $160,000. The amount covered a 12-month period. For the 2019 tax year, Baker may avoid the penalty for the underpayment of estimated tax if the timely estimated tax payments equal the required annual amount of

Answer 1

Given statement:

I. 90% of the tax on the return for the current year paid in four equal installments.

II. 110% of prior year's tax liability paid in four equal installments.

a. I only.

b. II only.

c. Both I and II.

d. Neither I nor II.

Answer:

Either I or II

Step-by-step explanation:

I. The 90% refund bill for the current year eliminates the under-payment provision for the estimated tax, or 110% of the past year's tax debt evades the under payment penalty for the projected tax the previous year's, or

II. Paying 110 percent of the tax liability of the preceding year prohibits the undercutting of estimated tax fines.

Usually, if you expect to owe $1,000 or more annually for your taxes, you are to have estimated taxes. The estimated taxes for the 2019 taxation year shall be due by 15 April 2019, 17 June 2019, 16 September 2019 and 15 January 2020.