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Scenario $5$: Estimated Taxes and Underpayment Penalties

Wages: None

Sole Proprietorship Business Income: $$250,000$

Interest and Dividend Income: $$2,000$

Itemized Deductions: $$20,000$

Allowable deduction for self$-$employment tax: $$20,000$

Total tax withheld throughout the year: $$10,000$

Calculate

AGI, Taxable Income, and Total Tax Liability

Required estimated tax payments for the year.

Determine if any underpayment penalties apply and calculate them.