Jeff's Tax Liability for Last Year Was $30,000

question 96

Essay

Jeff's tax liability for last year was $30,000. Jeff projects that his tax for this year will be only $25,000. Jeff is self-employed and, thus, will have no withholding. His AGI for last year did not exceed $150,000. How much estimated tax, at a minimum, should Jeff pay for this year to avoid the penalty for underpayment of estimated taxes? How would your answer change if his income exceeded last year's due to a large capital gain at the end of the year?

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Definitions:

Market Failure

A situation where the allocation of goods and services by a free market is not efficient, often justifying government intervention.

Isomorphism

A concept in sociology that refers to the process by which organizations in the same sector or context become increasingly similar to each other in structure and function.

Hybrid System

A combination of different technologies, methodologies, or systems that integrate to function together, often bringing together the best features of each.

Closed

This term could refer to an entity, system, or status that is not open for operation, participation, or access by the public or specific groups.