This year Lloyd, a single taxpayer, estimates that his tax liability will be $11,500. Last...
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Accounting
This year Lloyd, a single taxpayer, estimates that his tax liability will be $11,500. Last year, his total tax liability was $16,000. He estimates that his tax withholding from his employer will be $8,750.
a. How much does Lloyd need to increase his withholding by (for the year), in order to avoid the underpayment penalty?
| Increase in Withholding | ? |
b. Assuming Lloyd does not make any additional payments, what is the amount of his underpayment penalty? Assume the federal short-term rate is 5 percent. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)
| Dates | Actual Withholding | Required Withholding | Over (Under) Withheld | Penalty Per Quarter |
| April 15th | ||||
| June 15th | ||||
| September 15th | ||||
| January 15th | ||||
| Total |
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