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:

Religious

Pertaining to or connected with a belief in and worship of a superhuman controlling power, especially a personal God or gods.

Special Interest Groups

Organizations that raise and spend money to influence elected officials and/or public opinion.

Elected Officials

Individuals who have been chosen through a voting process to hold public office and represent the interests of the electorate.

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Structured groups of people with a common purpose, following specific rules and procedures to achieve collective goals.