Last year, Mr. Corbett's AGI was $141,000, and his total tax liability was $33,650. This year, his total tax liability is $35,290. Compute the minimum amount of current year tax that Mr. Corbett had to prepay (withholding and estimated payments) to avoid an underpayment penalty.

Question

Quizplus · Accepted Answer

To avoid an underpayment penalty, Mr. Corbett must prepay at least 90% of his current year tax liability or 100% of his previous year's tax liability, whichever is less. 90% of this year's tax liability is $31,761, which is less than last year's total tax liability of $33,650.

Last Year, Mr