Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps

Exercise 36

Charles and Joan Thompson file a joint return. In 2009, they had taxable income of $92,370 and paid tax of $15,469. Charles is an advertising executive and Joan is a college professor. During the fall 2010 semester, Joan is planning to take a leave of absence without pay. The Thompsons expect their taxable income to drop to $70,000 in 2010. They expect their 2010 tax liability will be $9,869, which will be the approximate amount of their withholding. Joan anticipates that she will work on academic research during the fall semester.
During September, Joan decides to perform consulting services for some local businesses. Charles and Joan had not anticipated this development. Joan is paid a total of $35,000 during October, November, and December for her work.
What estimated tax payments are Charles and Joan required to make, if any, for tax year 2010? Do you anticipate that the Thompsons will be required to pay an underpayment penalty when they file their 2010 tax return? Explain your answer (disregard the making work pay credit).