A penalty is assessed against individuals for failure to make adequate estimated tax payments.Which of the following is not true of that penalty?
A)The penalty is not assessed if the tax due is less than $1,000.
B)The penalty is not assessed if the total prepayments-withholding, estimated tax payments, and others-are at least 90 percent of the total tax due for the year.
C)The penalty is assessed from the due date of the installment until the tax is actually paid (if later).
D)The penalty is not assessed if the total prepayments-withholding, estimated tax payments, and others-equal or exceed the prior year's tax (unless taxable income exceeded $150,000).

Question

Quizplus · Accepted Answer

The penalty for underpayment of estimated taxes is assessed from the due date of the installment until the due date of the return (April 15 for most taxpayers), not until the tax is actually paid. This means that interest on underpaid amounts accumulates until the tax return due date, not until the tax is paid if the payment occurs after the due date.

A Penalty Is Assessed Against Individuals for Failure to Make