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Charles and Joan Thompson file a joint return. In 2019, they had taxable income of $90,160 and paid tax of $11,714. Charles is an advertising executive, and Joan is a college professor. During the fall 2020 semester, Joan is planning to take a leave of absence without pay. The Thompsons expect their taxable income to drop to $72,000 in 2020. They expect their 2020 tax liability will be 58,255, which will be the approximate amount of their withholding. Joan anticipates that she will work on academic research during che 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 $36,000 during October, November, and December for her work. Use the appropriate Tax Rate Schedules. Required: a. What estimated tax payments are Charles and Joan required to make, if any, for tax year 2020? Estimated tax payments required b. Do you anticipate that the Thompsons will be required to pay an underpayment penalty when they file their 2020 tax return? Assume that Charles and Joan made the estimated payment as determined in requirement a. O Yes O No

Charles and Joan Thompson file a joint return. In 2019, they had taxable income of $90,160 and paid tax of $11,714. Charles is an advertising executive, and Joan is a college professor. During the fall 2020 semester, Joan is planning to take a leave of absence without pay. The Thompsons expect their taxable income to drop to $72,000 in 2020. They expect their 2020 tax liability will be 58,255, which will be the approximate amount of their withholding. Joan anticipates that she will work on academic research during che 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 $36,000 during October, November, and December for her work. Use the appropriate Tax Rate Schedules. Required: a. What estimated tax payments are Charles and Joan required to make, if any, for tax year 2020? Estimated tax payments required b. Do you anticipate that the Thompsons will be required to pay an underpayment penalty when they file their 2020 tax return? Assume that Charles and Joan made the estimated payment as determined in requirement a. O Yes O No

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Charles and Joan Thompson file a joint return. In 2019, they had taxable income of $90160 and paid tax of $11,714. Charles is an advertising executive, and Joan is a college professor. During the fall 2020 semester, Joan is planning to take a leave of absence without pay. The Thompsons expect their taxable income to drop to $72,000 in 2020. They expect their 2020 tax liability will be $8,255, 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 $36,000 during October, November, and December for her work, Use the appropriate Tax Rate Schedules. Required: a. What estimated tax payments are Charles and Joan required to make, if any, for tax year 2020? Estimated tax payments required b. Do you anticipate that the Thompsons will be required to pay an underpayment penalty when they file their 2020 tax return? Assume that Charles and Joan made the estimated payment as determined in requirement a. O Yes ONo
Transcribed Image Text:Charles and Joan Thompson file a joint return. In 2019, they had taxable income of $90160 and paid tax of $11,714. Charles is an advertising executive, and Joan is a college professor. During the fall 2020 semester, Joan is planning to take a leave of absence without pay. The Thompsons expect their taxable income to drop to $72,000 in 2020. They expect their 2020 tax liability will be $8,255, 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 $36,000 during October, November, and December for her work, Use the appropriate Tax Rate Schedules. Required: a. What estimated tax payments are Charles and Joan required to make, if any, for tax year 2020? Estimated tax payments required b. Do you anticipate that the Thompsons will be required to pay an underpayment penalty when they file their 2020 tax return? Assume that Charles and Joan made the estimated payment as determined in requirement a. O Yes ONo
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2020 tax slab of married filing jointly is used to calculate the amount of the tax.

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