Tax Preparation Tax Withholding and Estimated Taxes

Question 1

Which IRS form do employees complete to instruct their employer on how much federal income tax to withhold from each paycheck?

Accepted Answer

Form W-4

Answer

Form W-4, the Employee's Withholding Certificate, tells employers how much federal income tax to withhold based on the employee's filing status and any adjustments.

Question 2

For calendar year taxpayers, when is the first quarterly estimated tax payment due?

Accepted Answer

April 15

Answer

The first quarterly estimated tax payment for the calendar year is due April 15, coinciding with the regular individual income tax filing deadline.

Question 3

Under the IRS safe harbor rule, a taxpayer can avoid an underpayment penalty by paying at least what percentage of the current year's tax liability?

Accepted Answer

90%

Answer

Taxpayers can avoid the underpayment penalty by paying at least 90% of the current year's tax liability, or 100% of the prior year's tax, whichever is smaller.

Question 4

Who is generally required to make quarterly estimated tax payments to the IRS?

Accepted Answer

Individuals who expect to owe at least $1,000 after withholding and credits

Answer

Individuals who expect to owe at least $1,000 in federal taxes after subtracting withholding and refundable credits must generally make quarterly estimated payments.

Question 5

Which IRS form is used to calculate and submit quarterly estimated tax payments?

Accepted Answer

Form 1040-ES

Answer

Form 1040-ES, Estimated Tax for Individuals, is the form used to calculate the estimated tax owed and to submit quarterly payments to the IRS.

Tax Preparation Practice Test

Tax Preparation Practice Test

Tax Preparation Tax Withholding and Estimated Taxes