An individual could pay 100% of her tax liability by the due date of her tax return and still be subject to underpayment tax penalties.

Question

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Underpayment tax penalties can be assessed if an individual did not make sufficient estimated tax payments throughout the year or failed to have enough tax withheld from their paycheck. Even if an individual pays 100% of their tax liability by the due date of their tax return, they may still be subject to penalties if they did not make sufficient estimated tax payments throughout the year.

An Individual Could Pay 100% of Her Tax Liability by the Due