This year Lloyd, a single taxpayer, estimates that his tax liability will be $13,300. Last year, his total tax liability was $17,200. He estimates that his tax withholding from his employer will be $9,890. a. How much does Lloyd need to increase his withholding by (for the year), in order to avoid the underpayment penalty? b. Assuming Lloyd does not make any additional payments, what is the amount of his underpayment penalty? Assume the federal short-term rate is 5 percent. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) Dates Actual withholding Required withholding Over (under withheld Penality per quater April 15th June 15th Sept. 15th Jan. 15th Total ------------------------------

This year Lloyd, a single taxpayer, estimates that his tax liability will be $13,300. Last year, his total tax liability was $17,200. He estimates that his tax withholding from his employer will be $9,890. a. How much does Lloyd need to increase his withholding by (for the year), in order to avoid the underpayment penalty? b. Assuming Lloyd does not make any additional payments, what is the amount of his underpayment penalty? Assume the federal short-term rate is 5 percent. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) Dates Actual withholding Required withholding Over (under withheld Penality per quater April 15th June 15th Sept. 15th Jan. 15th Total ------------------------------

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter2: Income Tax Concepts

Section: Chapter Questions

Problem 35P

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