A taxpayer with an AGI of $157,350 for 2017 pays estimated taxes.The taxpayer can avoid an underpayment penalty by paying:

Question

Quizplus · Accepted Answer

The taxpayer must pay at least 90% of the current year's tax liability (based on 2017 AGI) or 100% of the previous year's tax liability (based on 2016 AGI, if less than $150,000) in order to avoid an underpayment penalty. Option B is the only choice that meets this requirement. Option A is incorrect as it references 2015 tax liability, which is not relevant for the 2017 tax year. Option C requires payment of 100% of the current year's tax liability, which may not be necessary and could result in overpayment. Option D references a $100,000 AGI limit that does not apply to this taxpayer.

A Taxpayer with an AGI of $157,350 for 2017 Pays