Your Client Wants to Avoid Any Penalty for Underpayment of Estimated

question 42

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.

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

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Definitions:

Hindsight Bias

The tendency to overestimate one’s ability to have predicted an event after the outcome is known; the “I knew it all along” phenomenon.

Heuristic

A rule of thumb that suggests a course of action or guides problem solving but does not guarantee an optimal solution.

Cognitive Schema

A mental framework that helps organize and interpret information, based on past experiences and knowledge.

Cognitive Heuristic

Simple, efficient rules which people often use to form judgments and make decisions; they are mental shortcuts that reduce the cognitive load of making a decision.