2-45: Charles and Joan Thompson file a joint return. In 2020 they had taxable income of $92,370 and paid tax of $11,903. Charles is an advertising executive, and Joan is a college professor. During the fall 2021 semester, Joan is planning to take a leave of absence without pay. The Thompsons expect their taxable income to drop to $70,000 in 2021. They expect their 2021 tax liability will be $8,005, which will be the approximate amount of their withholding. Joan anticipates that she will work on academic research during the fall semester. During September, Joan decides to perform consulting services for some local businesses. Charles and Joan had not anticipated this development. Joan is paid a total of $35,000 during October, November, and December for her work. What estimated tax payments are Charles and Joan required to make, if any, for tax year 2021? Do you anticipate that the Thompsons will be required to pay an under-payment penalty when they file their 2021 tax return? Explain your answer.
2-45: Charles and Joan Thompson file a joint return. In 2020 they had taxable income of $92,370 and paid tax of $11,903. Charles is an advertising executive, and Joan is a college professor. During the fall 2021 semester, Joan is planning to take a leave of absence without pay. The Thompsons expect their taxable income to drop to $70,000 in 2021. They expect their 2021 tax liability will be $8,005, which will be the approximate amount of their withholding. Joan anticipates that she will work on academic research during the fall semester. During September, Joan decides to perform consulting services for some local businesses. Charles and Joan had not anticipated this development. Joan is paid a total of $35,000 during October, November, and December for her work. What estimated tax payments are Charles and Joan required to make, if any, for tax year 2021? Do you anticipate that the Thompsons will be required to pay an under-payment penalty when they file their 2021 tax return? Explain your answer.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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2-45: Charles and Joan Thompson file a joint return. In 2020 they had taxable income of $92,370 and paid tax of $11,903. Charles is an advertising executive, and Joan is a college professor. During the fall 2021 semester, Joan is planning to take a leave of absence without pay. The Thompsons expect their taxable income to drop to $70,000 in 2021. They expect their 2021 tax liability will be $8,005, which will be the approximate amount of their withholding. Joan anticipates that she will work on academic research during the fall semester. During September, Joan decides to perform consulting services for some local businesses. Charles and Joan had not anticipated this development. Joan is paid a total of $35,000 during October, November, and December for her work.
- What estimated tax payments are Charles and Joan required to make, if any, for tax year 2021?
- Do you anticipate that the Thompsons will be required to pay an under-payment penalty when they file their 2021 tax return? Explain your answer.
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