Question

Paul has the following information: AGI for 2019 Withholding for 2019 Total tax for 2018 Total tax for 2019 $ 155,000 = $ 28, 200 = $ 31,800 = $ 31,947 Required: a. How much must Paul pay in estimated taxes to avoid a penalty? (Round the final answer to nearest whole dollar amount.) Minimum estimated tax payment b. If Paul had paid $800 per quarter, would he have avoided the estimated tax penalty? Yes No

Table Tax for 2019

Answer 1

a) Paul has to pay the lesser of

90% of the Current Year Tax = 90% of $31,947 = $28,752.3
100% of the Previous Year Tax = $31,800
Since Paul has a withholding for 2019 of $28,200, it is deductable against the estimated taxes

Therefore, Estimated Tax Payment = $28,752 - $28,200 = $552.3

b) On paying $800 per quarter Paul wouldn't have avoided the estimated tax penalty.
Therefore the correct option is NO.