Question

Kana is a single wage earner with no dependents and taxable income of $155,000 in 2017. Her 2017 withholding was $32,000. Her 2016 taxable income was $151,000 and tax liability was $35,317.

Calculate Kana’s 2017 income tax liability and the minimum required 2017 annual payment necessary to avoid any penalty. Round your answers to two decimal places.

Click here to access the tax rate schedules.

1. Kana’s 2017 income tax liability: $

2. Kana’s minimum required 2017 annual payment necessary to avoid any penalty:

Answer 1

Taxable Income	$        155,000
Standard Deduction	$            6,350
Net Taxable Income	$        148,650

1.

Tax Slab	Limit	Tax Rate	Tax
13350	13350	10%	1,335.00
50800	37450	15%	5,617.50
131200	80400	25%	20,100.00
148650	17450	28%	4,886.00
Total Tax Liability			31,938.50
Withholding Tax			32,000.00
Tax Refundable			61.50

2. If minimum 90% of the Tax liability is paid, Kana can avoid penalty

90% of Tax Liability

31938.5*90%

28,744.65

Therefore, Minimum Tax to be paid to avoid the penalty is 28,744.65

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