Question:This year Lloyd, a single taxpayer, estimates that his tax liability will be $12,250. Last year, his total tax liability was $16,500.

He estimates that his tax withholding from his employer will be $9,225.

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.(Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.)

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. (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) April 15th June 15th January 15th September 15th __