Your Client Wants to Avoid Any Penalty for Underpayment of Estimated

question 50

Multiple Choice

Your client wants to avoid any penalty for underpayment of estimated taxes by making timely deposits.Determine the amount of the minimum quarterly estimated tax payments required to avoid the penalty.Assume your client's adjusted gross income last year was $140,000. $$\begin{array} { | l | r | } \hline \text { Last year's tax liability } & \$ 40,000 \\\hline \text { This year's estimated total tax } & 44,000 \\\hline \text { Taxes to be withheld for this year } & 9,000 \\\hline\end{array}$$

• A)$7,650
• B)$7,750
• C)$8,750
• D)$11,000

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Definitions:

Proving Accuracy

The process of ensuring that financial records and transactions are correct, precise, and free from error.

Cash Records

Documentation and tracking of all cash transactions, including receipts and expenditures, crucial for accurate financial reporting.

Accounts Receivable

Financial obligations of customers to a business for received goods or services awaiting payment.

Sales Uncollected

Refers to revenue from sales for which payment has not yet been received; also known as accounts receivable.