1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Veronika [31]
3 years ago
11

3. This year, Paula and Simon (married filing jointly) estimate that their tax liability will be $200,000. Last year, their tota

l tax liability was $170,000. They estimate that their tax withholding from their employers will be $175,000. Are Paula and Simon required to increase their withholdings or make estimated tax payments this year to avoid the underpayment penalty? If so, how much?
Business
2 answers:
choli [55]3 years ago
7 0

Answer:

When a taxpayer has an underpayment of estimated tax or fall behind on his/her tax prepayment, then he/she is required to pay a penalty on Form 2210. This penalty is called underpayment penalty.

According to the tax laws, Mr. P and Ms. S can avoid an underpayment penalty if their withholding's and estimated tax payments equal or exceed one of the following two safe harbors:

  • 90 percent of current tax liability ($200,000 x 90% = $180,000)
  • 110 percent of previous year tax liability (110% x $170,000 = $187,000)

From the above calculation, it is clear that Mr. P and Ms. S's withholding's ($175,000) do not equal or exceed the amount of two safe harbors. So, they need to increase their withholding's or make estimated payments to avoid underpayment penalty.

If Mr. P and Ms. S increase their withholding's by $5,000 or make estimated payments of $1,250

per quarter ($5000/4), they can avoid the underpayment penalty.

Mr. Paula and Simon average gross income is greater than $150,000, so 110% is taken.

Reika [66]3 years ago
7 0

Answer:

yes they are required to increase their withholding tax by $5000

Explanation:

Paula and Simon will have to increase their withholding or make estimated tax payments to avoid underpayment penalty if the fall inside these two categories

current tax withheld for current year ≤ 90% of the current tax liability or

current tax withheld ≤ 110% of the previous year tax liability

current tax liability = $200000

last year tax liability = $170000

tax withheld = $175000

90% of $200000 = $180000:  Is  greater than tax withheld ( $175000 )

110% of $170000 = $187000 :   Is greater than tax withheld ( $175000 )

To avoid underpayment penalty Paula and Simon should increase their withholding by at least $5000 or make estimated quarterly payments of $1250

You might be interested in
Identifying Financial Statement Line Items and Accounts Several line items and account titles are listed below. For each, indica
Anni [7]

Answer:

Explanation: Financial Statement

the financial statement is an annual statement stating the financial position of an organisation

Under the financial statement we have:

1. Income Statement: Expenses, Net Income

2. Balanced Sheet: Cash Asset, Non cash Asset, Retained Earnings

3. Statement of stockholders equity: Contributed Capital, cash inflow for stock issued, cash outflow for dividends

4. Statement of cash flow: cash flow for capital expenditures

8 0
2 years ago
How fast does q 500 Hz wave travel if its wavelength is 0.5m
Masteriza [31]

Where v is velocity/speed

f is frequency

and lambda is wavelength

v=(500)(0.5)= 250 m/s

Hope this helps!

6 0
3 years ago
Don purchases a car from Downtown Motors. Downtown Motors had purchased the car from Cindy
vova2212 [387]

Answer: Norman has a good title to the car

Explanation:

Norman is the original owner of the car, the car was stolen from him, every other person only has a stolen car.

3 0
3 years ago
Mexican american farm workers in california organized ________ to demand higher pay from their employers
KengaRu [80]
The United Farm Workers union
4 0
2 years ago
In the treatment of U.S. exports and imports, national income accountants _____. rev: 04_09_2018 Multiple Choice subtract export
pogonyaev

Answer:

The correct answer is: add exports but subtract imports in calculating GDP.

Explanation:

National income refers to the production of goods and services by the residents of a nation within the geographical boundaries of a nation in a given period.

In the calculation of national income, net exports are included. This net export is the difference between exports and imports. In other words, we can say that exports are added and imports are included.

6 0
2 years ago
Other questions:
  • According to a recent survey, insurance was cited as the biggest problem for small businesses. What is cited as the second most
    12·1 answer
  • Which of the following factors has the greatest impact in calculating FICO scores? Select one of the options below as your answe
    14·1 answer
  • David McClelland defined three human needs. The desire which leads individuals to put their competencies to work, take moderate
    12·1 answer
  • The inductive approach to writing a business argument:
    9·1 answer
  • State or federal codes that specifically apply to businesses are called: A. franchise law B. patent law C. business law D. tax l
    14·2 answers
  • A severe freeze has once again damaged the florida orange crop. the impact on the market for oranges will be a leftward shift in
    11·1 answer
  • One study of businesses maintains that many businesses are __________ flextime, job sharing, and paid family leave.
    13·1 answer
  • If the Federal Reserve announces that its target for the federal funds rate is rising from 4 percent to 4.25 percent, how do you
    8·1 answer
  • what to nations and businesses use to see how much producing some good will cost them in terms of not producing other goods
    15·1 answer
  • Which statement describes the effect of taxes on a traditional 401(k) retirement account?
    7·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!