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this year Lloyd a single taxpayer estimated his tax liability will be $11,650 last year his...

this year Lloyd a single taxpayer estimated his tax liability will be $11,650 last year his total tax liability was $16,100 he estimated is tax withholding from his employer will be $8,845. assuming or does not make any additional payments what is the amount of his underpayment penalty assume the federal short-term rate is 5%.

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Answer #1

ANSWER:

Federal short term rate = 5%

Extra percentage = 3%

Percentage per quarter = 25%

Calculation of the amount of his underpayment penalty

Dates

Actual withholding

Required withholding

over(under) withhold

penalty per quarter

Apr-15

2211

2621

-410

8.2

(8845 x 1/4)

(11650*.9*.25)

410*8%*25%

Jun-15

4423

5243

-820

16.4

8845 x 1/2

11650*.9*.5

820*8%*25%

Sep-15

6634

7864

-1230

24.6

8845 x 3/4

11650*.9*.75

1230*8%*25%

Jan-15

8845

10485

-1640

32.8
11650*.9*1 1640*8%*25%

82.00
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