Question

Which of these is NOT an exception to the failure to make estimated payments for a full-year U.S. resident with an AGI under $100,000?

A) Balance due of less than $1,000.

B) No tax liability the previous year.

C) Paid 100% of prior year's tax liability.

D) Paid 110% of prior year's tax liability.

Answer 1

Correct answer is b) No tax liability in previous year

As per Publication 505 in fllowing conditions no estimated payment is to be made

1. If balance due is less tha $1,000

2.If income tax withholding and refundable credits be at least 100% of the tax shown on your previous year tax return.

So greater than 100% is alos covered in Second point.It means if 100% or 110% tax is paid of prior year tax liability no estimated payment reauired to be paid for current year