A taxpayer with an AGI of $157,350 for 2014 pays estimated taxes.The taxpayer can avoid an underpayment penalty by paying:

Question

Quizplus · Accepted Answer

According to the safe harbor rule, taxpayers can avoid an underpayment penalty by paying either 90% of the current year's tax liability or 100% of the previous year's tax liability (110% for high-income taxpayers) ratably over four quarterly payments. Since the taxpayer's AGI for 2014 is not mentioned, we cannot assume that the previous year's AGI is less than $100,000. Therefore, the best choice is to pay at least 90% of the 2014 tax liability ratably over four quarterly payments to avoid an underpayment penalty.

A Taxpayer with an AGI of $157,350 for 2014 Pays