Posted: April 26th, 2016

# Based on this information, Julie’s required annual payment for estimated taxes should have been [a] \$, and each quarterly installment would have been[a] \$??

Underpayment of Estimated Taxes (LO. 6)
Julie, being self-employed, is required to make estimated payments of her tax liability for the year. Her tax liability for 2011 was \$25,000, and her AGI was less than \$150,000. For 2012, Julie ultimately determines that her income tax liability is \$18,000. During the year, however, she made the following payments, totaling \$13,000:

April 16, 2012: \$4,500
June 15, 2012: 2,800
September 17, 2012: 4,100
January 15, 2013: 1,600
Total: \$13,000

Because she prepaid so little of her ultimate income tax liability, she now realizes that she may be subject to the penalty for underpayment of estimated tax.
a. Based on this information, Julie’s required annual payment for estimated taxes should have been [a] \$, and each quarterly installment would have been[a] \$.
b. The amount by which Julie underpaid her estimated tax is[c] \$.
c. If Julie’s tax liability for 2011 was \$15,960, then the amount by which she underpaid her estimated taxes is[d] \$

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