Your Client Wants to Avoid Any Penalty for Underpayment of Estimated

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 avoi the penalty. Assume your client's adjusted gross income last year was $140,000. $$\begin{array} { | l | r | } \hline \text { Last year's tax liability } & \$ 40,000 \\\hline \text { This year'sestimated total tax } & 44,000 \\\hline \text { Taxes to be withheld for this year } & 9,000 \\\hline\end{array}$$

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

Correct Answer:

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