Barbara was divorced two years ago. However, the final property settlement and determination of alimony payments was

Question:

Barbara was divorced two years ago. However, the final property settlement and determination of alimony payments was not made until February 2017 because of extended litigation. Barbara received a $20,000 payment of back alimony in March 2017 and will receive monthly alimony payments of $2,000 for the period April through December 2017. Last year, Barbara’s income consisted of $15,000 salary and $2,000 of taxable interest income, and her tax liability was $1,900. She expects to continue working at an annual salary of $15,000 and will have $2,000 of interest income. Federal income taxes withheld from her salary will be $1,500. Her monthly alimony payments of $2,000 are also expected to continue for an indefinite period.

In early April 2017 Barbara requests your advice regarding the payment of 2017 quarterly estimated taxes. Prepare a memo to your client that discusses these requirements, including any possible penalties for not making quarterly payments and nontax issues such as cash-flow and investment income decisions.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Federal Taxation 2018 Comprehensive

ISBN: 9780134532387

31st Edition

Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson

Question Posted: