This year Lloyd, a single taxpayer, estimates that his tax liability will be $12,250. Last year, his
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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.)
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