In March 2016, Vincent anticipates that his actual tax liability for the tax year 2015 will be $12,000 and that federal income taxes withheld from his salary will be $9,000. Thus, when he files his income tax return in early 2016, he will have a $3,000 balance due. In the previous year, his actual federal income tax liability was $8,000 and his AGI was less than $150,000.
a. Is Vincent required to make estimated tax payments in 2015?
b. If no estimated tax payments are made, will Vincent be subject to an underpayment penalty if the actual tax liability for 2015 is $12,000? Why or why not?
c. Will Vincent be subject to an underpayment penalty if his 2014 AGI was $175,000? Why?