8-78 (LO 8-5) (Algo) This year, Paula and Simon (married filing jointly) estimate that their tax liability will be $216,500. Last year, their total tax liability was $181,000. They estimate that their tax withholding from their employers will be $187,650. a. Are Paula and Simon required to increase their withholdings or make estimated tax payments this year to avoid the underpayment penalty? Yes O No b. By how much, if any, must Paula and Simon increase their withholding and/or estimated tax payments for the year to avoid underpayment penalties? Increase in withholding $ 11,565