BarBRanch has had taxable income of $450,000, $570,000, $760,000 and $680,000 in years 2015 through 2018, respectively. What were the equal minimum quarterly estimated tax payments for 2018 that BarBRanch should have made in 2018 to avoid any penalty?

Question

Quizplus · Accepted Answer

The correct answer is A.The equal minimum quarterly estimated tax payments for 2018 that BarBRanch should have made in 2018 to avoid any penalty is $35,576. This is because the required annual estimated tax payment is 90% of the current year's tax liability or 100% of the prior year's tax liability, whichever is less. The prior year's tax liability is $680,000, so the required annual estimated tax payment is $680,000 x 100% = $680,000. The equal minimum quarterly estimated tax payments are $680,000 / 4 = $35,576.

BarBRanch Has Had Taxable Income of $450,000, $570,000, $760,000 and $680,000