Question

Mark the incorrect answer. Estimated income tax payments:

a. Need not be filed if the estimated tax, after subtracting withholding, can reasonably be expected to be more than $1,000.
b. May be based on the amount of the tax liability for the prior year.
c. If inadequate, may result in nondeductible penalties.
d. Are made in four installments on April 15, June 15, and September 15 of the tax year and on January 15 of the following year.

Answer 1

a. Need not be filed if the estimated tax, after subtracting withholding, can reasonably be expected to be more than $1,000.

Step-by-step explanation:

Mr. Levy's estimated tax is the tax payment method for his income that is not subject to withholding. This income includes the earnings he receives from self-employment, interest, dividends, rents, and alimony. In addition, if Mr. Levy does not choose to have taxes withheld from his other taxable income, he should also make estimated tax payments.