Ms. Marston has net tax owing for 2018 of $4,500, net tax owing for 2019 of $8,000, and estimated net tax owing for 2020 of $7,500. If she wishes to pay the minimum total amount of instalments for the 2020 taxation year, her first payment on March 15 will be for what amount?
A)Nil.
B)$1,125.
C)$1,875.
D)$2,000.

Question

Quizplus · Accepted Answer

In order to determine the minimum total amount of instalments for the 2020 taxation year, Ms. Marston must choose the smallest amount from the following three values:
1. 25% of the net tax owing for 2018 ($4,500 x 25% = $1,125)
2. 25% of the net tax owing for 2019 ($8,000 x 25% = $2,000)
3. 50% of the estimated net tax owing for 2020 ($7,500 x 50% = $3,750)
The smallest amount is $1,125, which represents 25% of the net tax owing for 2018. Therefore, Ms. Marston's first payment on March 15 will be for $1,125.

Ms Marston Has Net Tax Owing for 2018 of $4,500